UC-NRLF 


•       «l444.s        »444'»        ^'^w*       *4#-*       *<444°^       *■■ 


««»**»'•       »u4Mb» 


«4#fk®        m  4M^»        « 


F 


HnHiwimwMi 


■«wi  iwi'iiiiwiiiiiieww— w 


iL«       •4'4'*        »»**•»        •4fr»       •4f=r»       •7 

ifiinmi— --irn iT  *  ^i    in  i  -  r-.r-^-"  ■     -       "^ '  ' '' '^ 


*        «'tfr»        ««fw*        •* 


«*-        CO 


o 


>- 


LIBRARY 

UNIVERSITY  OF  CALIFORNIA. 

Clius 

) 

THE' 


Theory  of  Accounts 


CONTAINING  THE  ESSENTIALS  OF 


BOOKKEEPING 


AND  FORMS  OF 


HIGHER    ACCOUNTING 


-BY- 


SAMUEL  H.  GOODYEAR,  A.  M. 

AUTHOR  or 
THE  GOODYEAR  COMMERCIAL  SERIES. 


CEDAR  RAPIDS,  IOWA. 
THE  GOODYEAR-MARSHALL  PUBLISHING  COMPANY. 

1901. 


f 


<a 


^'^^liAL 


COPYRIGHT  BY 

THE  GOODYEAR  PUBLISHING  COMPANY. 

1899. 


Introductibn. 


IN  introducing  this  volume  the  author  desires  to  say  that  it  has  not  been  prepared  as  a  refer- 
ence book  for  expert  accountants,  but  as  a  text-book  for  students  who  may  begin  the  study 

with  a  very  limited  knowledge  of  the  subject  of  Accounts. 

We  have  selected  a  starting  point  that  is  plain,  practical,  and  easily  comprehended  by  all, 
and  by  carefully  graded  steps  have  led  the  thoughtful  student  to  the  broader  principles  of  the 
Science  of  Accounts. 

The  book  has  been  written  for  the  theoretical  study  of  Accounts.  It  is  not  intended  to 
furnish  material  for  Business  Practice,  but  rather  to  prepare  the  student  for  intelligent  work  in 
Business  Practice  or  counting  room. 

In  developing  the  subject  it  has  been  the  author's  aim  to  give  standard  forms  and  methods 
as  they  are  now  used  by  business  men,  avoiding,  on  the  one  hand,  the  obsolete  forms  that  ap- 
pear in  many  text-books,  but  which  the  commercial  world  has  long  since  passed  in  its  career 
of  progress.  Bookkeeping  as  a  study  has  a  comrhercial  value  only  when  its  methods  are  modern 
and  abreast  of  the  times;  while  the  classical  methods  used  ten  or  twenty  years  ago  are  now  of 
little  worth  to  the  student  who  intends  to  make  practical  use  of  his  commercial  study. 

On  the  other  hand  we  have  aimed  to  avoid  some  of  the  new  methods  which  may  be 
adapted  to  isolated  cases  in  business,  but  which  do  not  assist  the  student  in  acquiring  a  working- 
knowledge  of  bookkeeping  as  a  science  and  an  art. 

We  trust  that  the  student  will  be  true  to  himself  and  pass  nothing  by,  even  in  the  illustrated 
forms,  that  he  does  not  fully  understand.  A  student  that  is  working  under  pressure  to  com- 
plete the  text  in  the  shortest  possible  time  is  sometimes  tempted  to  become  a  mere  copyist  of 
forms,  under  the  delusive  idea  that  what  he  has  written  in  his  books  he  has  fully  mastered.  To 
remove  this  temptation  we  have  prepared  these  forms  in  such  a  way  that  the  student  cannot 
safely  copy  any  of  the  entries  without  first  understanding  the  explanations  and  the  transactions 
pertaining  to  them. 

The  manuscript  forms  of  account  books  have  been  introduced,  not  for  copies  or  for  the 
embellishment  of  the  text,  but  to  represent  pages  of  business  forms  written  by  a  practical  ac- 
countant, in  an  easy  and  rapid  style  tliat  is  easily  read  and  easily  acquired.  It  is  the  author's 
belief  that  reproduced  pages  of  business  writing,  as  it  appears  in  a  set  of  books,  with  no  pre- 
tense at  copperplate  accuracy,  but  written  with  ease  and  rapidity,  and  withal  perfectly  legible, 
will  far  better  represent  business  writing  as  applied  to  bookkeeping  than  the  same  number  of 
pages  of  accurately  engraved  writing  could  do. 

The  author  has  aimed  at  producing  a  practical  text,  that  would  depend  more  upon  the 
results  it  may  accomplish  than  upon  the  first  impression  produced  by  a  hurried  examination  of 
its  pages. 

In  conclusion  we  could  say  to  the  student,  do  not  compel  your  teacher  to  think  for  you. 
His  work  should  be  that  of  a  critic  and  advisor;  and  even  though  you  may  spend  an  hour  on 
one  transaction  before  you  have  mastered  it  for  record,  you  have,  if  you  have  studied  earnestly, 
developed  power  that  will  be  worth  far  more  to  you  than  the  time  you  have  spent. 


Table  of  Contents. 


THE  ESSENTIALS  OF  BOOKKEEPING, 


PAGE. 

Accounts 5 

Cash  Accounts 6 

Cash  Accounts,  Illutrated 7 

Accounts  with  Persons 8 

Rule  for  Debit  and  Credit 8 

Personal  Accounts,  Illustrated 9 

Property  Accounts 10 

Rule  for  Property  Accounts 11 

Property  Accounts,  Illustrated 12 

Set  1 — Bookkeeping  for  Farmers  and  Tradesmen  13 

Complete  Account  Book,   Illustrated 15 

Question  for  Review 18 

Systems  ok  Bookkeeping 19 

Sets — Single  Entry  for  Retail  Merchants  i 20 

Historical  Entries 22 

The  Day  Book,  Illustrated 23 

The  Cash  Book,  Illustrated 24 

Ledger  Accounts,  Illustrated 25 

Statements ^_.  27 

The  Statement,  Illustrated 29 

Questions  for  Review 30 

Set  3— Single  E?itry  for  Partnership  Business. .  31 

The  Day  Book,  Illustrated 33 

Cash  and  Bank  Account,  Illustrated 36 

The  Bill  Book,  Illustrated 37 

Ledger  Accounts,  Illustrated 38 

Partner's  Statement,    Illustrated 42 

Questions  for  Review 43 

Double  Entry 44 

General  Rule  for  Debit  and  Credit __.  44 

Special  Rules  for  Debit  and  Credit 43 

Methods  of  Bookkeeping 47 

The  Day  Book 47 

The  Journal 48 

The  Ledger 48 

The  Proof  Sheet 49 

Exercises  in  Double  Entry 49 

The  Day  Book,  Illustrated 51 

The  Journal,  Illustrated.-- 52 

The  Ledger,  Illustrated 53 

The  Proof  Sheet,  Illustrated 55 

One  Debit  and  Several  Credits 56 


Several  Debits  and  One  Credit. 

Opening  a  Set  of  Books 

Proving  the  Ledger 

Correcting  Errors 

Closing  the  Ledger. 


page. 
-_  58 
...  59 
.-.  60 
...  61 
...    62 


The  Double  Entry  Statement 64 

The  Ledger  Closed 65 

Questions  for  Review 72 

Set  4 — Double  Entry  for  Btiying  and  Shipping.     73 

The  Historical  Journal,  Illustrated 75 

The  Double  Entry  Cash  Book,  Illustrated.    76 

Consignment  Account,  Illustrated 77 

Continued  Trial  Balances 79 

Changing  from  Single  to  Double  Entry...  84 
Balance  Sheets 85 

Set  j—Cotitinuatio?i  of  Set  3  in  Double  Entry...    87 
Opening  Journal  Entry,  Illustrated 87 

Set  6 — Double  Entry  for  Wholesalers 91 

The  Special  Column  Journal,  Illustrated..  95 
The  Special  Column  Cash  Book,  Illustrated  97 
The  Sales  Book,  Illustrated 98 

Set  7 — Double  Entry  for  Lumber  Dealers 106 

Methods  of  Computing  Lumber 107 

The  Special  Column  Purchase  and  Sales 

Book 110 

The  Six  Column  Journal 111 

Business  Forms 117 

Promissory  Notes 117 

Drafts 119 

Bank  Checks 120 

Certificates  of  Deposit . 120 

Orders 121 

Indorsements 122 

Receipts 122 

Marginal  Records 123 

Remarks  and  Legal  Points... 124 

Notice  of  Non-payment 126 

Protest 127 

Bills 127 

Account  Sales 129 

Invoices  of  Shipment 130 

Mercantile  Terms 131 

Abbreviations 136 


HIGHER  ACCOUNTING. 


page. 

Set  8—Part?iership  Settlements 138 

Problems  in  Partnership 138 

Set  9— Bookkeeping  for  Corporations.  140 

Transactions 143 

The  Stock  Ledger 144 

Set  10— Bookkeeping  for  Manufacturers 145 

Transactions 147 

The  Books,  Illustrated 150 

Set  J 1— Commission  and  Forwarding 161 

Transactions 163 

The  Books,  Illustrated 166 

set  12— Keeping  Abstracts  of  Title 170 


The  Books,  Illustrated. 


PAGE. 

...  172 


Set  13— Real  Estate  Business 174 

Transactions _  175 

The  Books  Used 176 

Set  14— Practical  Banking 180 

The  Daily  Routine 180 

The  Auxiliary  Books 181 

The  Essential  Books 183 

Transactions 184 

The  Books,  Illustrated 186 

Business  Forms  in  Banking 196 

Bank  Correspondence 201 


Accounts, 


An  account  is  a  statement  of  business  transactions,  as  they  relate  to  a  particular  person  or 
thing.  The  title  of  an  account  is  the  name  of  the  person  with  whom,  or  the  thing  with  which 
the  account  is  kept. 

When  the  title  owes  the  business  or  receives  value  from  it,  the  title  is  debtor,  and  the  amount 
of  the  value  is  a  debit.  When  the  business  owes  the  title  or  receives  value  from  it,  the  title  is 
creditor,  and  the  amount  of  such  value  is  a  credit. 

An  account  is  kept  by  placing  its  debits  in  one  column  and  its  credits  in  another  column, 
and  the  result  at  any  time  is  found  by  taking  the  difference  between  the  total  debits  and  credits 
of  the  account.  It  is  a  universal  custom  to  place  the  debits  in  the  left  of  two  money  columns, 
and  credits  in  the  right  of  these  columns. 

Each  money  column  is  divided  into  two  columns  for  dollars  and  cents,  the  dollar  column 
being  preceded  by  a  double  line,  and  the  cents  column  by  a  single  line.  Amounts  written  in 
the  money  columns  will  not  need  the  dollar  sign  and  the  decimal  point  to  distinguish  dollars 
from  cents. 

Fractions  of  a  cent  are  never  written  in  the  money  columns.  If  the  fraction  is  one-half  cent 
or  more,  it  is  recorded  as  a  cent;  if  less  than  one-half  cent  it  is  dropped. 

A  complete  account  should  also  contain  columns  for  the  date  of  each  entry,  and  a  place 
for  describing  the  items  of  each  debit  or  credit.  There  are  three  forms  of  arranging  the  col- 
umns of  an  account,  each  of  which  will  be  illustrated  in  succeeding  chapters.  The  first  form 
occupies  a  single  page  having  debit  and  credit  columns  side  by  side,  with  the  space  preceding 
them  ruled  into  columns  for  date  and  explanation  (See  Cash  Account  on  page  7.)  The  second 
form  divides  the  page  vertically  into  two  equal  parts,  and  places  the  debit  vvith  its  date  and  ex- 
planation columns  in  the  left  half,  and  the  credit  with  its  date  and  explanation  columns  in  the 
right  half  (See  R.  E.  Lee's  account  on  page  24.)  The  third  form  uses  two  opposite  pages  of  an 
open  folio,  placing  the  column  for  date,  explanation,  and  debits  on  the  left  page;  and  corre- 
sponding columns  for  credits  on  the  right  page  (See  Cash  Received  and  Paid  on  pages  24 
and  25.) 

Accounts  are  kept  with  persons,  cash,  notes  receivable,  and  notes  payable,  and  also  with 
property  and  other  titles  representing  special  classes  of  transactions. 

We  will  not  develop  the  classes  of  accounts  in  the  order  just  named,  but  will  select  the  simpler 
of  these  first,  and  pass  to  the  more  difficult  classes  later  in  the  text. 


THE  ESSENTIALS  OF  BOOKKEEPING. 


I.  Cash  Account. 


The  object  of  the  cash  account  is  to  keep  a  record  of  our  cash  dealings,  showing  when  we 
received  money,  of  whom  and  for  what  we  received  it;  and  when  we  paid  money,  to  whom  and 
for  what  we  paid  it.  Cash  received  is  recorded  in  the  left  or  debit  column  of  cash  account,  and 
cash  paid  is  recorded  in  the  right  or  credit  column  of  cash  account. 

When  cash  account  is  opened,  the  cash  on  hand  should  be  placed  in  the  received  or  debit 
column.  The  excess  of  the  amounts  in  the  received  column  over  those  in  the  paid  column  will 
show  the  cash  on  hand  at  any  time. 

Cash  account  is  balanced  at  any  time,  by  placing  in  the  paid  column  the  excess  of  the  re- 
ceipts over  the  payments  and  writing  the  words  "Balance  on  hand"  in  the  explanation  column. 
This  balance  entry  is  written  in  red  ink,  to  distinguish  it  from  payments. 

Cash  account  is  closed  by  ruling  a  single  line  across  the  money  columns  to  indicate  addi- 
tion, placing  the  totals  of  the  columns  under  the  addition  line,  and  ruling  double  lines  across 
the  money  columns  below  the  totals,  and  also  across  the  date  columns. 

The  totals  in  the  money  columns  should  be  written  in  black  ink,  and  the  lines  should  be 
ruled  in  red  ink. 

It  is  the  custom  of  bookkeepers  to  indicate  the  prominent  words  in  an  entiy  by  the  use  of 
initial  capital  letters.  Names  of  merchandise  and  other  property,  periods  of  time,  and  amounts 
expressed  in  words  are  usually  capitalized  in  bookkeeping  entries. 

The  student  should  use  a  loose  page  of  journal  paper  for  recording  the  following  cash  tran- 
sactions, observing  carefully  the  model  entries  on  page  7.  The  account  should  be  balanced,  as  il- 
lustrated in  the  model  account,  whenever  the  cash  balance  is  given  in  the  course  of  the  transactions. 
The  student  will  observe  that  balance  entries  and  rulings  are  in  red  ink. 

Journal  paper  has  usually  several  blue  lines  running  parallel  to  the  vertical  red  lines  in  the 
dollar  columns.  These  are  called  unit  lines,  and  they  are  used  to  keep  the  amounts  in  proper 
order  for  addition,  units,  tens,  hundreds,  and  thousands  of  dollars,  each  having  its  own  column. 
Amounts  above  thousands  are  not  frequent  in  an  ordinary  business  and  hardly  need  special 
columns. 

If  journal  paper  is  not  at  hand,  the  student  can  rule  a  page  of  foolscap  paper  in  the  journal 
form.  The  date  columns  should  be  ruled  three-fourths  of  an  inch  wide  for  the  month,  and  three- 
eighths  of  an  inch  wide  for  the  day  of  the  month.  The  received  and  paid  columns  should  be  ruled 
three-fourths  of  an  inch  wide  for  dollars,  and  three-eights  of  an  inch  wide  for  cents,  leaving  the  space 
between  date  and  amount  columns  for  the  explanatory  entries.  In  ruling,  the  student  should  make 
the  lines  firm  and  even,  without  shading. 

In  writing  the  exercises  required,  the  student  should  not  allow  himself  to  copy  the  illus- 
trated forms,  but  merely  refer  to  them  as  model  entries,  making  his  own  entries  from  the  tran- 
sactions. 

TRANSACTIONS. 

[Sec  Illustrated  Accoiuit  onpag-e  7.) 

189 — ,  Sept.  I.  Left  home  with  cash  on  hand  ;^45 Paid  for  railway  ticket  to  Col- 
lege City  ^3.75. 

2.     Paid  for  fare  at  hotel  ;^i Paid*  for  carting  trunk   25c Paid  for    one 

week's  board  to  9th  inst.  ^3.75. 

-     3.     Paid  for  scholarship  in  Business  College  for  3  months  $25 Paid  for  books  and 

stationery  ^4.50. 

4.      Paid  for  envelopes,  paper  and  postage  ^i Paid  for  a  pair  of  gloves  ^1.25. 

6.     Paid  for  fruit  25c On  counting  my  cash  this  evening  I  find  that   I   have  only 

$\  on  hand,  leaving  a  shortage  of  25c.  After  reviewing  m}'  transactions  carefully,  I  recall  a 
ticket  to  a  lecture  on  the  evening  of  Sept.  4,  for  which  I  paid  25c,  and  which  I  neglected  to 
record. 


CA  SH  A  ceo  UNTS. 


\^Examples  of  the  Cash  Account^ 


i.^yta.^C'i:^ 


/r^- 


J2ji^<^. 


r 


^ c^-yT^  L^-t-^^  ■ 


^  ,^T<l-T^O  . 


¥S 


^s 


J 

/ 

J 

/ 
/ 


IL 


¥S 


So 

2S 

zs 


2S 


[transactions  continued  from  page  6,] 

8.  Gave  to  church  collection  last  evening  25c Received  cash  from  home  $6. 

9.  Paid  for  board  to  i6th  inst.  $Z-7S- 

10.  Paid  for  ruler  25c,  and  for  red  ink  and  pens  25c. 

1 1.  Paid  for  fruit  35c. 

12.  Paid  for  laundry  75c. 

13.  Paid  for  a  pair  of  shoes  ^2.75 Counted  my  money,  finding  a  balance  of  ^^  1.65 

on  hand. 

15.  Paid  for  postage  15c. 

16.  Received  cash  from  home  $\o Paid  for  board  to  23d  inst.  ;^3.75. 

18.  Paid  for  blank  books  ;^ I. 

19.  Paid  for  laundry  60c.     Received  cash  from  my  mother  $1. 

20.  Paid  for  hat  ;^2.25,  collars  50c Counted  my  money,  finding  a  balance  of  $^.40. 

22.  Paid  for  fruit  25c. 

23.  Paid  for  board  to  30th  inst.  ^3.75. 

24.  Received  cash  from  home  ^5. 

25.  Paid  for  laundry  75c. 

26.  Paid  for  ticket  to  concert  75c. 

27.  Paid  for  an  excursion  trip  on  the  river  ;^i Counted  my  cash,  finding  a  balance 

of  $2  90  on  hand. 

The  student  may  balance  the  account  for   Sept,    27,  and    bring    down  the   balance    dated 
Sept.  29. 


ESSENTIALS  OF  BOOKKEEPING. 


II.    Accounts  With  Persons. 

Accounts  with  persons  are  usually  kept  in  the  form  illustrated  on  page  9,  with  debit  and 
credit  columns  side  by  side  on  a  single  page;  or  in  the  ledger  form  illustrated  in  Set  Two,  with 
debit  entries  on  the  left  half  of  the  page,  and  credit  entries  on  the  right  half  of  the  page,  a  sep- 
arating line  being  ruled  vertically  between  the  debits  and  credits. 

RULE  FOF^  DEBIT  AND  CREDIT. 

A  -person  is  our  Debtor,  when  he  owes  iis  or  receives  anything-  from  us  on  account; 
and  our  Creditor,  when  zue  owe  him  or  receive  anything- from  him  on  account. 

RULES  FOR  CLOSING  PERSONAL  ACCOUNTS. 

In  order  to  close  an  account  that  balances  : 

Draxu  a  sing'le  red  line  across  the  inoney  columns,  place  the  totals  of  the  columns 
in  black  i)ik  under  this  line,  and  rule  double  red  lines  under  the  totals  and  across  the 
date  colu77tns. 

In  order  to  close  an  account  that  does  not  balance  : 

Make  a  red  ink  entry  on  the  smaller  side,  g-iving-  the  date  on  zvhich  the  account  is 
balanced,  using  as  explanation  the  zuord  ''^Balance,''  ajid placing"  in  the  smaller  column 
an  amount  that  will  make  its  total  equal  to  that  of  the  larg-er  column.  After  which, 
place  footings  and  rided  lines  as  in  preceding  rule. 

The  student  will  use  journal  paper  or  rule  pages  for  the  following  accounts,  as  explained 
in  the  preceding  example. 

Accounts  with  Parks  and  Strand  will  each  occupy  only  a  half  page.  A  full  page  each 
should  be  used  for  accounts  with  Thompson  and  Newman. 

TRANSACTIONS. 

1 

(transactions  with  henry  parks.) 
{See  Illustrated  Account  on  Pag-e  p.) 

Mar.  I.     Henry  Parks  has  repaired  my  wagon  on  account,  charging  me  ;^8. 

2.  I  have  paid  him  cash  to  apply  on  account  $$. 

3.  He  has  shod  my  horses  on  account,  charging  me  $j. 

4.  Sold  him  on  account  10  bu.  apples  at  85c, 

5.  Sold  him  on  account  20  doz.  eggs  at   15c. 

6.  Received  cash  from  him  in  full  of  account  1^5.50. 
Close  the  account. 

2 

(transactions    with    GEORGE    STRAND.) 

{See  Illustrated  Accotint  on  page  p.) 

Apr.  I.     Sold  George  Strand  on  account  2  tons  hay  at  $6.00  per  ton. 

2.  Received  of  him  cash  to  apply  on  account  ^10. 

3.  Sold  him  on  account  5  bu.  potatoes  at  50c. 

4.  Bought  of  him  on  account  one  wagon  at  $60. 

5.  Worked  for  him  with  team  5  days  on  account,  charging  him  $l  per  day. 

6.  Paid  him  cash  on  account  ^^10.50,  leaving  a  balance  of  ^30  still  due  him. 
Close  the  account. 


ACCOUNTS  WITH  PERSONS. 


\^Thc   StiidenVs    Account   zviih   Hoiry    Parks  A 


/^9- 


7^ 


.S'S 


3- 


/  asc         /  <2'  so 


s  so 


[^The    Studcni' s  Account   %vith  Georg-c    Slrcuid^ 


-<5^€ie'C?-^^-^-^^_-<2ll^^^^,-t52-if'7>i:^ 


~W^ 


2Ay. 


A 


e>o 


2 
J 

6 


•/ 


.S£> 


S.oo 


/  2 
/J' 

'/  d  sa\ 


7'' 


/  c 


^c 


7' 


lo  ESSENTIALS  OF  BOOKKEEPING. 

3 

(transactions    with    H.    THOMPSON.) 

May  I.     Bought  of  H.  Thompson  on  account  20  yards  print  at  6^c,  36  yds.  brown  sheet- 
ing at  83^c. 

3.     Sold  him  on  account  10  bu.  potatoes  at  65c. 
10.     Bought  of  him  on  account  6  yds.  broadcloth  at  ;^3.25. 
I  5.      Paid  him  cash  to  apply  on  account  ;^iO. , 
17.     Sold  him  on  account  2  cords  wood  at  ^4.75. 
22.     Bought  of  him  on  account  sundry  merchandise,  per  bill  rendered,  ^9. 

24.  Worked  for  him  on  account  2  days  in  store  at  $  1 .50. 

25.  Bought  of  him  on  account  24  yds.  flannel  at  50c. 

26.  Sold  him  on  account  24  lbs.  butter  at  15c. 

27.  Returned  the  flannel,  bought  on  the  25th  inst.,  which  was  damaged,  receiving  credit 
for  the  same,  and  buying  on  account  12  yds.  cashmere  at  90c. 

28.  Sold  him  on  account  i^  tons  of  hay  at  ;^8.50. 

29.  Received  cash  from  him  in  full  of  account  ;^i.6o. 
Close  the  account. 

4 

(transactions    with    M.    NEWMAN.) 

June  I.     Sold  M.  Newman  on  account  20  lbs.  butter  at  18c. 

3.  Bought  of  him  on  account  30  lbs.  sugar  at  6c,  10  lbs.  coffee  at  22c. 

5.  Sold  him  on  account  3  cords  wood  at  ,^4.50. 

9.  Bought  of  him  on  account  2  lbs.  tea  at  75c. 

15.  Sold  him  on  account  15  doz.  eggs  at  12c. 

16.  Bought  of  him  on  account  3  cans  peaches  at  25c,  20  lbs.  sugar  at  5c. 

17.  Sold  him  on  account  20  lbs.  butter  at  i.S^c. 

18.  Received  cash  from  him  to  apply  on  account  ;^5. 
20.  Sold  him  on  account  i  ton  hay  at  ^8. 

22.     Bought  of  him  on  account  sundry  groceries,  per  bill  rendered,  $22.75. 

30.  Pastured  two  horses  for  him  on  account  for  the  month,  charging  ;^i.25   for  each. 
Paid  him  cash  to  balance  account  $2.50. 

Close  the  account. 


III.    Property  Accounts. 

A  person  can  keep  an  account  with  his  property  or  with  any  variety  of  his  property,  and 
thereby  determine  the  profit  or  loss  derived  from  the  same. 

A  farmer  can  keep  an  account  with  his  wheat  field  or  corn  field,  or  his  cattle  or  poultry 
and  determine  which  department  of  his  farming  is  most  profitable. 

A  merchant  can  keep  an  account  with  his  merchandise,  and  determine  the  profit  or  loss 
on  his  sales. 

A  carpenter  can  keep  an  account  with  each  house  he  builds  on  a  contract,  debiting  it  with 
the  cost  of  all  materials  and  labor  expended  upon  the  house,  and  crediting  it  with  the  amount 
received  for  the  house,  and  the  difference  will  show  his  profit  or  loss  on  the  contract. 

Property  accounts  may  be  kept  in  any  business,  such  titles  being  chosen  as  will  distinguish 
these  accounts  from  others  on  the  books. 

Property  accounts  may  be  kept  in  any  of  the  forms  used  for  personal  accounts.  If  the 
total  credits  exceed  the  total  debits,  the  excess  shows  a  gain.  If  the  total  debits  exceed  the 
total  credits,  the  excess  shows  a  loss. 


PR  OPER  TT  A  ceo  UNTS.  1 1 

RULE  FOR  PROPERTY  ACCOUNTS. 

Debit  property  titles  for  any  value  expended  upon  them ;  and  credit  them  for  any 
value  realized  from  them. 

Property  accounts  are  closed  the  same  as  personal  accounts,  except  that  "Loss"  or  "Gain" 
is  written  in  place  of  the  word  "Balance"  in  the  red  ink  entry. 

Paper  can  be  used,  as  already  explained,  for  the  following  accounts,  allowing  a  page  for 
each  one. 

TRANSACTIONS. 

1 

(account  with  a  potato  field.) 
{See  Illustrated  Account  on  page  12.) 

May  I.     Worked  two  days  plowing  and  marking  potato  field  at  $l  per  day. 

5.  Planted  15  bu.  seed  potatoes  worth  6oc  per  bu. 

6.  Worked  5  days  planting  potatoes  at  ;^i.50  per  day. 

June  5.     Worked  3  days  cultivating  potatoes  at  ^2.50  per  day. 

10.      Worked  6  days  hoeing  potatoes  at  ;^i.50  per  day. 

July  I.     Worked  3  days  cultivating  potatoes  at  ^2.75  per  day. 

10.     Worked  7  days  hoeing  potatoes  at  $1.2^  per  day. 

Oct.  I  5.      Worked  10  days  digging  potatoes  at  ^^1.25  per  day. 

Nov.  I.     Sold  250  bushels  potatoes   from   potato   field  at  40c  per  bu.,  and  kept  for  home 

use  50  bu.  potatoes  worth  35c  per  bu The  use  of  the  ground  for  the  potato   field   is  worth 

;^  I  5 My  gain  on  the  potato  field  is  ,$34. 

Close  the  account. 

2 

(account  with    20  head  of  horses.) 

{See  Illustrated  Account  on  pag'c  12.) 
July  I.      Paid  for  20  head  of  horses  ;^2450. 
10.      Paid  for  care  of  horses  ^^7.50. 
15.      Paid  for  freight  on  horses  $250. 
17.      Paid  for  feed  and  care  of  horses  ;^30. 
20.     Received  cash  for  5  head  of  horses  ;^750. 

25.  Paid  for  advertising  horses  ^  I  2.50. 

26.  Paid  for  feed  and  care  of  horses  $g. 

27.  Received  cash  for  8  head  of  horses  ^1280. 

28.  Paid  for  feed  and  care  of  horses  ^12.75. 

29.  Received  cash  for  7  head  of  horses  ;^685. 

30.  My  time  and  expenses  while  selling  horses  amount  to;^57.7  5.  My  loss  on  the  horses 
is  ^i  14.50. 

Close  the  account. 

3 

(account  with    20  HEAD  OF  HOGS.) 

Aug.  I.      Paid  for  20  head  of  hogs,  weighing  2360  lbs.  at  3c  per  lb. 
Nov.  I.     Paid  for  pasturing  hogs  3  months  at  ^7.50  per  mo. 
.5.     Paid  for  i  50  bu.  corn,  for  feeding  hogs,  at  40c  per  bu. 

6.      Paid  for  grinding  50  bu.  corn  for  hogs  at  6c  per  bu. 
Dec.  I.     Care  of  hogs  to  date  is  worth  ;^7.50. 

5.      Received  cash  for  10  head  of  hogs,  weighing  2425  lbs.  at   5c  per  lb. 
10.      Paid  cash  for  50  bu.  corn  for  hogs  at  35c  per  bu. 
12.      Paid  for  grinding  25  bu.  corn  for  the  hogs  at  5c  per  bu. 

24.  Received  cash  for  10  head  of  hogs,  weighing  2720  lbs.  at  5^c  per  lb. 

25.  Care  of  hogs  since  Dec.  i,  is  worth  $g.     What  is  my  gain  ? 
Balance  and  close  the  account. 


12 


ESSENTIALS   OF  BOOKKEEPIXG. 


\^Exainple  One — Pai^'c  //] 


Aj-l/  -^y^. 


/ 
s 

/o 

/ 

/c 

/J 

/ 


2.  £a:^U>su<-e/0''^^^-t<''«'-'--s-^  £2^»<t<s:^^^Z«-'i-*^«-»-t-^ 


/.sc 

2.S6 
/..SO 
-2,7  J 
/,-?- 
/.Zt 
.  Vc 
.35 


3^ 


/  /  /  SH^ 


/  /J 


/J- 


/ 


/' 


777^ 


JfZ? 


J-^ 


[Example  Two — Pag-e  //.] 

K-^^U-iy^^^ti^-^  ..■'^^9'^-e^t^i^c^  t^.^V^c^<-^^  c<y^Lyf  "^^1/ 


/ 
/o 

// 

26 
2:5 
2& 

^7 

28 
2y 
SO 


cc^L-e^ 


2  ^S  C 

'< 

/ 

2S  O 
36 


St 


/  y  Sc' 


cy 


/i.  7.' 


/ 


7/ 


/so 


/  28'C'' 


C.S-S 


/  />-/ 


2B2ySL      2  8-2*^/. 


SO 


BOOKKEEPING  FOR  FARMERS  AND   TRADESMEN  13 

4 

(account  with   building,  no.   59  ELM  STREET.) 

Entered  into  a  contract  to  build  a  house  on  Lot  No.  59  Elm  street,  for  which  I  am  to  re- 
ceive ;^2000,  payable  in  installments  during  the  progress  of  the  work. 
Apr.  I.     Paid  for  stone  for  the  basement  ^i  50. 

5.     Paid  for  lime  and  sand  ;^30. 

8.      Paid  for  excavating  cellar  ;^20. 
1  5.     Paid  for  laying  stone  walls  $60. 
20.      Received  cash  to  apply  on  contract  ^300. 

24.  Paid  for  lumber  for  the  house  $62^^. 

May  15.      Labor  of  self  and  men  enclosing  the  house  amounts  to  ^355. 
20.     Received  cash  to  apply  on  contract  ;$500. 
June  I.      Paid  for  lime  and  sand  for  plastering  ^50. 

25.  Paid  the  masons  for  plastering  ;^i  i  5. 

26.  Received  cash  to  apply  on  contract  ;^6oo. 

28.      Paid  for  tin  work  on  roof  ^75.  .  ^ 

July  15.     Labor  of  self  and  men  finishing  the  carpenter  work  amounts  to  1^125.  . 

25.      Paid  for  painting  the  house  ;^I50. 

30.     Received  cash  for  balance  due  on  contract What  is  my  gain? 

Balance  and  close  the  account.  •      *  . 


SET  ONE. 

BOOKKEEPING  FOR  FARMERS  AND  TRADESMEN. 

Laboring  men  are  not  usually  engaged  in  speculative  enterprises,  and  hence,  they  do  not 
require  a  complicated  set  of  account  books. 

If  every  wage  worker  would  take  a  few  minutes  at  the  close  of  each  day  to  record  his  cash 
transactions,  as  well  as  his  dealings  on  account  during  the  day,  he  would  find  these  records  of 
great  value  and  satisfaction  to  himself  in  succeeding  months. 

In  addition  to  his  accounts  with  persons,  every  man  should  keep  a  record  of  his  verbal 
contracts  and  agreements,  so  that  he  may  refer  to  them  at  any  time  in  the  future. 

The  form  of  cash  account  and  personal  accounts  already  illustrated  will  be  adapted  to  the 
limited  transactions  of  persons  of  this  class. 

A  farmer  can  keep  his  accounts  in  the  same  form,  but  his  business,  if  properly  cared  for, 
will  require  one  or  more  property  accounts  in  addition  to  his  accounts  with  cash  and  with  per- 
sons. It  would  be  well  for  him  to  notice  carefully  the  results  from  the  different  departments  of 
his  labor,  and  by  comparing  these  results  he  can  determine  with  greater  certainty  which  de- 
partment pays  the  best. 

If  a  farmer  employs  hired  help,  he  should  open  an  account  with  each  laborer,  entering  un- 
der his  name  a  memorandum  of  the  terms  of  che  contract,  and  giving  his  former  address  if  he 
is  not  from  the  same  neighborhood. 

If  a  hired  hand  is  engaged  to  work  by  the  month  and  loses  time,  he  should  be  debited 
with  the  time  he  has  lost,  as  well  as  with  any  amounts  he  has  received  to  apply  on  his  wages  ; 
and  at  the  end  of  each  month  he  should  have  credit  for  the  full  month's  wages  at  the  contract 
price. 

In  case  of  a  settlement  of  an  account  with  any  person,  if  the  account  is  paid  in  full,  or  even 
if  a  balance  unpaid  is  agreed  upon  as  correct,  the  account  should  be  closed,  even  if  a  balance  is 
forwarded  and  new  entries  are  to  be  made  at  once  after  the  agreement. 

The  account  with  Reuben  West,  given  on  page  16,  illustrates  the  application  of  the  last 
three  paragraphs. 


14  ESSENTIALS  OF  BOOKKEEPING. 

In  the  following  transactions  we  have  made  provision  for  two  property  accounts,  one  with 
Poultry  and  another  with  Cornfield.  In  Poultry  account,  as  in  other  accounts  like  it,  where  the 
business  is  continued  from  year  to  year,  and  the  entire  property  is  not  disposed  of  at  any  one 
time,  the  value  of  the  poultry  on  hand  at  the  close  of  the  year  should  be  added  to  the  credits, 
before  the  actual  gain  or  loss  can  be  found.  This  value,  called  an  inventory,  can  be  brought 
down  as  a  debit  in  the  new  account,  if  it  is  desired  to  continue  the  account. 

The  account  with  Poultry,  given  on  page  15,  illustrates  the  method  of  recording  the  value 
of  poultry  at  the  beginning  and  close  of  the  year,  and  also  the  gain  on  poultry  during  the  year. 

In  recording  the  following  transactions  the  student  will -give  a  page  in  the  complete  ac- 
count book  each  to  Cash,  Poultry,  H.  Grant,  James  Drew,  Reuben  West  and  Cornfield.  Un- 
less the  student  has  a  clear  understanding  of  accounts,  it  would  be  to  his  advantage  to  write  the 
accounts  on  loose  pages  and  submit  them  for  correction,  before  recording  the  transactions  in 
his  blank  book. 

TRANSACTIONS. 

JANUARY. 

{See  Illustrated  Accounts  on  ^ag'es  75  and  16.) 

1.  My  cash  on  hand  amounts  to  ;^  120 Poultry  on  hand  are  worth  $^$. 

2.  Sold  H.  Grant  on  account  5  cords  wood  @  ;^4.50. 

5.  Paid  cash  for  repairs  on  wagon  $1,  and  for  shoeing  horses  1^2.50. 

6.  Sold  James  Drew  on  account  two  tons  hay  @  ;^8,  and  bought  of  him  on  account  sun- 
dry dry  goods  amounting  to  ^7.50. 

I  5.     Received  cash  of  H.  Grant  to  apply  on  account  ;^io. 

18.  Paid  cash  for  taxes  on  the  farm  ^28,20. 

20.     Bought  sundry  groceries  of  H.  Grant  on  account  amounting  to  ;^4.8o. 
25.     Paid  cash  for  10  head  of  sheep  at  $4  each. 

30.  Feed  for  poultry  during  the  month  is  worth  $t.2^,  and  their  care  is  worth  ;^3. 
[Debit  Poultry.] 

FE.BRUARY. 

2.  Received  cash  for  50  bu.  oats  @  30c. 

5.  Bought  sundry  groceries  of  H.  Grant  on  account  amounting  to  $6.45, 

20.  Paid  cash  for  suit  of  clothes  for  self;$  16.50. 

21,  Received  cash  for  five  head  of  hogs  ^65. 

25.  Have  used  5  doz.  eggs  worth  22  cts.  per  dozen  for  which  poultry  should  have  credit. 

27.  Sold  H.  Grant  20  doz.  eggs  on  account  at  23  cts.  per  doz.  [Debit  Grant.  Credit 
Poultry.]  . 

28.  Feed  for  poultry  during  the  month  is  worth  ^1.50,  and  their  care  is  worth  ^3.25. 

MARCH. 

I.     Engaged  Reuben  West,  of  Blairstown,  Iowa,  to  do  general   farm   work   for  me   till 
Aug.  I,  at  ;^20  per  month  and  board,  commencing  today. 

1 4.     Bought  of  James  Drew  on  account  one  overcoat  for  self  costing  ;^  16.50. 

19.  Bought  sundry  groceries  of  H.  Grant  on  account  amounting  to  $9.55. 

21.  Have  sold  eggs  for  cash  as  follows:  30  doz.  @  22c,  and  10  doz.  @  21c.  [Cash 
received,  credit  Poultry.] 

25.  Have  used  10  doz.  eggs  worth  20  cts.  per  dozen. 

26.  Paid  cash  for  lumber  to  repair  poultry  house  ^5.     [Cash  paid,  debit  poultry.] 

31.     Feed  for  poultry  this  month  is  worth  $2,  and  their  care  ;^i.2  5 Reuben  West 

has  lost  3  days'  time  during  the  month  estimated  at  70  cents  per  day.      [Debit  West  for   lost 
time,  and  credit  him  for  wages  one  month.] 


BOOKKEEPING  FOR  FARMERS  AND   TRADESMEN. 


15 


^ya-z-^-'C^ZyL^ 


c/y^iy.         --t^^t^ 


^ 

/ 

(S^i^-<i.e^<^^^  ^y^.A>c^^^ 

JS 

J^ 

^^^'f^^^/ /.2S'^  -1^et^.^^y^  J 

V 

2S 

^^. 

2S 

/ 

/o 

V 

¥ 

&0 

2.8 

^yS&,e.^=<i^  ^ /,  S^^   -^a^-L.^  ^  J.  2  S- 

¥ 

7^ 

.^^, 

2/ 

/O        „             0 ^y..<^  ^^z:<s;<i<4^                                           .2/ 

6, 
.   2 

Co 

2S 
2t^ 

S 

2 

J/ 

^Sf^l..<:?^/  Z  .   "^co^L-ey ^ /.  2  S- 

J 

2S 

C^'^t'^. 

/s- 

20 

so 

^? 

/o      „     (py^.^^^  ^^^^-^^^^-^^.^.^.^^          ./2;^2 

/ 

2S 

JO 

^^^.e.^^  ^  /.rs^    -^  ,;l^.,^ -^  / .  SO 

3 

2S 

/Tt-iZy 

22 

■/2  a^^ry'.      p'^^^^,^  ...^2^<;->»-7_^X--<^i<i^.€-/                   ./2'/2. 

'/ 

SO 

J/ 

^-y^le-^c^rLy  -^  2.  2Sj    '^^^-t.^-^/^  vj? 

.  s 

2S 

U.fyi.e^ 

/s 

20 

2  cd^.  -^.^..^.^^.^^ty^    ^^'C-c^.a^^              ^¥.00 

8' 
Z 

¥0 

28- 

/ 

SO 

¥ 

/" 

~(f>c<.^t.e^ 

/ 

7^ 

/S 
/O 
J/ 

JO 

/■2 

/  /  S 

2.3 

s-o 
SO 

20 

1:11 

OS 

¥0 

23  ¥ 

fS 

23¥ 

ss 

i6 


ESSENTIALS  OF  BOOKKEEPING. 


X 


'yi^ 


^^i^^. 


>. 


ii<:«-l/' 


y 


J/ 

s 

3/ 


/ 


^:J^-a<iy^ 


"^?=^ 


^/ 


■^<^-< 


7(7 


7' 


c? 


/■^ 


/ 


/  ^ 


^^ 


^^^ 


/  2 
/  S 


^0 


/O 


^0 


2S 


7^ 


'S 


2i? 


2  0 


2i^ 


20 


ra 


2  0' 


2<^ 


"/O 


BOOKKEEPING  FOR  FARMERS  AND   TRADESMEN.  17 

APKIL. 

5.  Gave  Reuben  West  an  order  on  James  Drew  for  dry  goods  amounting  to  ^10.  [Debit 
West  and  credit  Drew.] 

I  I.  Bought  sundry  groceries  of  H.  Grant  on  account  amounting  to  $y.0$  ;  and  sold  him 
on  account  50  bu.  potatoes  @  40c. 

15.      Paid  James  Drew  cash  on  account  ;^5. 

18.      Have  sold  40  doz.  eggs  for  cash  @  15c. 

20.     Sold  H.  Grant  on  account  20  doz.  eggs  @  I2^c. 

23.     Paid  James  Drew  cash  on  account  :$iO. 

25.      Gave  Reuben  West  an  order  on  H.  Grant  for  groceries  $^,  to  apply  on  wages. 

27.  Have  used  10  doz.  eggs  worth  I2^c  per  doz. 

28.  Paid  Reuben  West  cash  ;^io  to  apply  on  wages. 

30.      Feed  for  poultry  this  month  is  worth  $W/^  and  their  care  $1.50 Reuben  West 

has  lost  2  days  time  this  month  estimated  at  70  cts,  per  day.     [Debit  West  for  lost  time,  and 
credit  him  for  wages  one  month.] 

MAY. 

5.  Bought  sundry  merchandise  of  James  Drew  on  account  amounting  to  ^26.75  and  paid 
him  cash  to  apply  on  account  ;^20. 

8.     Worked  with  team  8  days  plowing  cornfield,  estimating  the  work  at  ;^2.50  per  day. 
I  I.      Worked  with  team  3  days  harrowing  cornfield  at  $2.25  per  day. 

15.  Worked  with  team  and  planter  2  days  planting  cornfield  at  ;^3.50  per  day.  Used  5 
bu.  seed  corn  worth  $1  per  bu. 

16.  Paid  cash  for  use  of  corn  planter  $4.     [Cash  paid,  debit  Cornfield.] 

18.  Paid  Reuben  West  cash  ;^fo,  and  gave  him  an  order  on  H.  Grant  for  groceries,  ^3;  50 
to  apply  on  his  wages. 

Have  used  12  doz.  eggs  worth  i2)4c  per  doz. 

Paid  cash  for  meal  and  flour  ^1.50. 

Feed  for  poultry  this  month  is   worth  ;^2.2  5,  and  their   care  $t, Reuben  West 


22 

23 
31 


has  lost  2  days'  time  this  month,  estimated  at  70  cts.  per  day. 

JUNE.. 

12.     Sold  James  Drew  on  account  20  lbs.  butter  at   i8c. 
15.     Sold  2  doz.  chickens  for  cash  at  $4.  per  doz. 

20.  Bought  sundry  merchandise  of  James  Drew  on  account,  amounting  to  ;$ii.75,  and 
sold  him  on  account  6  chickens  at  40c  each. 

24.  Have  worked  with  team  in  cornfield  15  days,  estimating  the  same  at  $t,  per  day. 

25.  Paid  a  boy  cash  for  hoeing  corn  15  days  at  75c  per  day. 

28.  Have  used  10  doz.  eggs  worth  15c  per  doz,  and  have  sold  for  cash  25  doz.  eggs  at 
1 6c  per  doz. 

30.  Reuben  West  has  lost   no  time  this   month,   and  I  have  paid  him  cash  $16.60  and 

have  balanced  his  account,  showing  a  balance  oi  $20  due  him Care  of  poultry  this  month 

is  worth  ;^i.75. 

JULY. 

10.  Paid  James  Drew  cash  on  account  ^12.50. 

1  5.  Sold  eggs  and  poultry  worth  1^12.50  to  H.  Grant  on  account. 

17.  Bought  sundry  merchandise  of  James  Drew  on  account,  amounting  to  $24.50. 

18.  Received  cash  for  vegetables  from  garden,  ;^7.50. 

25.      Have  worked  with  team  in  cornfield  20  days,  estimating  the  same  at  $2,  per  day. 
27.     Paid  cash  for  hoeing  corn  10  days  at  ^i  per  day. 

31.  Reuben  West  has  lost  3  days' time,  estimated  at  75  cts.  per  day.  As  West's  contract 
closes  today,  I  have  settled  in  full  with  him,  paying  him  cash  ;^iO,  and  giving  him  an  order  on 
H.  Grant  for  ;$I2.75,  and  an  order  on  James  Drew  for  ;^I5. 


1 8  ESSENTIALS  OF  BOOKKEEPING, 

NOVE.MBE.R. 

25.  The  cornfield  has  yielded  1,000  bu.  sound  corn  worth  30c  per  bu.,  200  bu.  soft  corn 
worth  15c  per  bu.,  and  fodder  for  feed  worth  $30. 

26.  Sold  James  Drew  on  account  50  bu.  corn  at  32c,  and  bought  sundry  merchandise  of 
him  on  account,  amounting  to  $19.25. 

27.  Paid  cash  for  cutting  and  shocking  corn  $40. 

30.  Worked  25  days  with  team  husking  and  hauling  corn  and  fodder,  estimating  the 

same  at  $2.50  per  day. 

DE,C£,MB£R. 

10.     Received  cash  for  eggs  and  poultry  sold  since  July  $l  15. 

15.  Received  cash  for  the  stalks  in  the  cornfield  $25,  which  were  not  included  in  the  esti- 
mate of  fodder,  given  Nov.  25. 

20.     Closed  the  account  with  Cornfield,  showing  gain  09  same  for  the  season  ${  13.50. 

24.  Received  a  bill  for  groceries  purchased  of  H.  Grant  on  account  at  sundry  times  since 
Aug.  1,  amounting  to  $33-75,  for  which  I  have  not  given  him  credit.  Sold  him  25  bu.  corn  @ 
32c,  and  paid  him  cash  to  balance  his  account  $22.75. 

26.     Paid  James  Drew  cash  in  full  of  account  $45.75. 

31.  Have  used  eggs  and  poultry  since  July,  worth  $23.50 Feed  and  care  of  poultry 

for  past  six  months  are  worth  $30 Use  of  the  poultry  house  for  the  year  is  worth  $20 

Poultry  on  hand  are  worth  $40 Cash  on  hand  is  $59.65. 


QUESTIONS  FOR  REVIEW. 

Following  each  general  topic  in  the  book  we  have  arranged  a  list  of  questions  to  guide  the 
student  in  reviewing  the  principles  over  which  he  has  passed.  In  no  case  have  we  given  a 
question  that  has  not  had  an  answer  direct  or  implied  in  the  preceding  remarks  or  illustrated 
forms. 

I.  What  is  an  account?  2.  What  is  the  title  of  an  account?  3.  Wiicn  is  a  title 
debtor?  4.  When  is  a  title  creditor?  5.  How  is  an  account  kept?  6.  How  are  dollars 
and  cents  indicated  in  a  debtor  or  creditor  column?  7.  What  is  done  with  fractional  amounts? 
8.  What  columns  are  necessary  in  a  complete  account?  9.  What  are  the  three  forms  of  ar- 
ranging the  columns  of  an  account?  10.  With  what  besides  persons  may  accounts  be  kept? 
1 1.  What  is  the  object  of  a  cash  account?  12.  In  which  column  of  cash  account  do  we  re- 
cord cash  received?  13.  In  which  column  do  we  record  cash  paid?  14.  Where  should  the 
cash  on  hand  be  placed,  at  the  beginning  of  the  account?  15.  How  can  cash  account  show 
the  cash  on  hand  at  any  time?  16.  How  is  cash  account  balanced?  17.  How  is  cash  ac- 
count closed?  18.  How  are  the  prominent  words  in  an  entry  indicated?  19.  When  is  a 
person  debtor,  and  when  creditor  ?  20.  What  are  the  rules  for  closing  personal  accounts  ? 
21.  What  is  the  advantage  of  keeping  a  property  account  ?  22.  What  is  the  rule  for  debit- 
ing and  crediting  property  titles  ?  23.  In  opening  a  property  account,  what  entry  is  made  of 
property  on  hand?  24.  In  closing  a  property  account,  what  entry  is  made  of  the  property  on 
hand  ?     25.     How  is  the  loss  or  gain  on  property  determined,  and  how  is  it  recorded  ? 


SrSTEMS  OF  BOOKKEEPIXG, 


19 


Systems    of    BooKKeeping. 


3My 


M 


^%m^ 


ofkK 


r-^. 


Tmt 


t: 


20  ESSENTIALS  OF  BOOKKEEPING. 


SET  TWO. 

SINGLE,  ENTRY  FOR  RE.TAIL  MERCHANTS. 

In  recording  the  following  transactions,  the  cash  book  and  day  book  will  be  used  for  the 
historical  entries,  and  the  ledger  will  be  used  for  posting  the  debits  and  credits  of  persons  from 
the  day  book  and  cash  book. 

THE  CASH  BOOK. 

The  cash  book,  illustrated  on  pages  24  and  25,  differs  from  the  cash  account  illustrated  on 
page  7,  in  using  two  pages  of  an  open  folio.  The  left  page  is  used  for  cash  receipts,  and  the 
right  page  for  cash  payments. 

The  cash  book  serves  a  double  purpose,  in  showing  all  receipts  and  payments  of  cash,  and 
also  showing  the  personal  debits  and  credits  for  cash  that  require  entry  in  the  ledger.  Since 
all  receipts  and  payments  of  cash  do  not  apply  on  account,  and  hence  do  not  require  ledger 
entries,  it  follows  that  a  distinction  should  be  made  in  making  different  entries  in  the  cash  book 
in  order  that  the  bookkeeper  may  determine  at  a  glance  what  cash  entries  require  posting  to 
the  ledger,  and  what  ones  may  be  passed  by,  in  the  posting.  If  a  person  receives  or  pays  cash 
to  apply  on  his  account,  his  name  should  be  given  the  prominent  place  in  the  cash  book,  next 
to  the  date  column ;  and  if  he  receives  or  pays  cash  that  does  not  apply  on  his  account,  his 
name  should  be  given  the  secondary  place,  if  used  at  all,  and  the  thing  for  which  cash  was 
received  or  paid  should  have  the  prominent  place  in  the  explanatory  column.  Cash  received 
on  account  credits  the  person  paying  the  cash,  and  all  entries  posted  to  the  ledger  from  the 
received  side  of  the  cash  book  are  credits;  while  cash  paid  on  account  debits  the  person  receiv- 
ing the  cash,  and  all  entries  posted  to  the  ledger  from  the  paid  side  of  the  cash  book  are  debits. 

The  cash  investment  or  the  cash  balance  should  be  entered  in  the  last  column  of  the 
received  side,  the  first  column  being  reserved  for  the  cash  receipts  which  should  be  added  daily 
or  weekly,  and  the  totals  extended  to  the  last  column,  showing  the  total  receipts  for  such  peri- 
ods of  time.  In  the  same  manner  the  cash  payments  can  be  entered  in  the  first  column  of  the 
paid  side,  and  the  total  payments  for  a  corresponding  period  of  time  can  be  extended  to  the  last 
column,  which,  like  the  last  column  of  the  received  side,  is  reserved  for  totals,  balance  entries, 
and  footings. 

Sales  at  retail  for  cash  and  small  purchases  for  cash,  are  usually  entered  on  tickets  or  slips 
of  paper  which  are  placed  on  file  at  the  desk  or  cash  drawer.  At  the  close  of  the  day  the  sale  tickets 
are  added  together  and  their  total  is  entered  as  "received  for  cash  sales,"  and  the  total  of  the  pur- 
chase tickets  is  recorded  as  "  paid  for  cash  purchases." 

THE  DAY  BOOK. 

In  opening  a  new  set  of  books,  the  business  address  and  the  date  should  first  be  entered  in 
the  day  book  at  the  top  of  the  first  page  used  for  records.  Following  these  the  proprietor's 
name  should  be  given,  and  also  a  list  of  the  resources  and  liabilities  belonging  to  the  business. 
If  any  of  the  resources  or  liabilities  consist  of  balances  of  account  due  to  or  from  persons,  such 
balances  should  each  have  a  place  in  the  new  ledger.     (See  Model  Day  Book  on  page  23.) 


SINGLE  EN  TR  T  FOR  RE  TA IL  MER  CHA  NTS.  2 1 

If  a  person  with  whom  we  open  an  account  has  some  other  postoffice  address  than  that  of 
our  place  of  business,  such  address  should  be  given  in  the  ledger  along  with  the  title.  To  in- 
sure its  appearance  in  the  ledger,  it  should  be  given  along  wMth  the  person's  name  in  the  origi- 
nal entry  when  it  is  first  determined  that  a  ledger  account  is  necessary. 

Bills  of  merchandise  bought  at  wholesale  are  usually  accompanied  by  invoices  giving  items 
and  prices.  If  such  purchases  are  on  account,  the  credit  may  be  made  in  the  daybook  for  the 
amount  of  the  bill  without  recording  the  items.  In  case  of  purchases  on  account  not  accom- 
panied by  invoices,  and  in  case  of  sales  on  account,  the  items  and  prices  should  be  recorded  in 
the  day  book. 

As  every  transaction  of  ours  on  account  with  any  person  must  make  that  person  either 
our  debtor  or  our  creditor,  it  follows  that  recording  in  our  day  book  the  person's  name  with  the 
term  debtor,  abbreviated  Dr.,  would  mean  that  he  had  received  from  us  on  account  the  items 
given  in  the  record;  and  his  name  with  the  term  creditor,  abbreviated  Cr.,  would  mean  that  we 
had  received  from  him  on  account  the  items  given  in  the  record. 

If  we  wish  to  make  entries  in  the  day  book  that  do  not  show  debits  or  credits,  we  can  use 
any  descriptive  style  that  may  be  brief  and  plain  and  omit  the  term  Dr.  or  Cr. 

The  day  book  is  generally  ruled  with  two  amount  columns,  the  first  being  used  for  the 
items  of  a  transaction,  and  the  second  for  the  total  of  these  items.  If  only  one  item  belongs  to 
a  transaction,  its  amount  can  be  carried  out  to  the  last  column. 

A  transaction  that  is  partly  for  cash  and  partly  on  account,  as  a  purchase  with  cash  paid  for 
a  part  of  the  amount  and  the  balance  on  account,  or  a  sale  with  cash  received  for  a  part  of  the 
amount  and  the  balance  on  account,  should  be  posted  in  full  in  the  ledger.  The  entire  purchase 
should  be  credited  from  the  day  book,  and  the  cash  paid  to  apply  on  same  should  be  debited  from 
the  cash  book;  or  the  entire  sale  should  be  debited  from  the  day  book,  and  the  cash  received  to  ap- 
ply on  same  should  be  credited  from  the  cash  book. 

THE,   LE^DGER. 

The  ledger  is  not  a  book  of  original  entries,  and  hence,  every  entry  in  it  should  first  have 
an  itemized  record  in  sorne  historical  book.  The  ledger  is  generally  ruled  for  accounts  in  the 
second  form,  with  date,  explanation  and  amount  columns  for  the  debits  on  the  left  half  of  the 
page;  and  similar  columns  for  credits  on  the  right  half  of  the  page.  The  items  of  a  transaction 
are  not  usually  given  in  the  ledger;  but,  instead  of  this,  a  column  is  ruled  next  to  the  amount 
column,  for  recording  the  page  of  the  historical  book  from  which  the  entry  is  posted.  Thus, 
the  ledger  becomes  a  summary  of  debits  and  credits,  showing  results  without  giving  items; 
while  a  reference  from  the  page  column  of  the  ledger  to  the  historical  book,  will  give  all  neces- 
sary items  and  explanations. 

Since  the  accounts  are  posted  from  more  than  one  book,  it  follows  that  the  figures  in 
the  page  column  of  the  ledger  must  refer  to  different  historical  books.  The  explanation 
column  in  the  ledger  account  should  contain  the  name  of  the  book  from  which  the  account  is 
posted. 

The  ledger  page  of  the  account  should  be  written  as  a  postmark  on  the  left  margin  of  the 
original  entry,  which  serves  a  double  purpose.  It  indicates  that  the  entry  has  been  posted,  and 
it  also  gives  the  page  of  the  ledger  on  which  the  entry  may  be  found.  This  latter  information 
is  of  great  service  to  the  bookkeeper  in  reviewing  his  posting,  as  it  avoids  the  necessity  of  his 
referring  to  the  index  to  find  the  location  of  ledger  accounts. 

A  ledger  that  has  any  considerable  number  of  accounts  should  have  each  title  of  account 
indexed  as  soon  as  it  has  been  assigned  to  a  page.  Ledgers,  unless  very  large  books,  have 
index  sheets  in  the  front  of  the  book,  in  which  a  page  or  part  of  a  page  is  devoted  to  each  letter 
of  the  alphabet,  so  that  all  surnames  of  persons  and  all  other  titles  of  accounts  beginning  with  a 
pirticular  letter  of  the  alphabet,  may  be  entered  in  the  space  assigned  to  that  letter,  and  oppo- 
site each  title  is  space  for  recording  the  number  of  the  page  where  the  account  may  be  found. 
Large  ledgers  frequently  have  index  sheets  in  a  separate  book,  which  avoids  the  turning  of  the 
leaves  in  the  large  book  so  repeatedly  to  find  the  index  pages. 

It  is  essential  that  all  young  accountants  should  acquire  the  habit  of  indexing  accounts  as 
soon  as  they  have  been  opened  in  the  ledger,  to  avoid  the  danger  of  opening  more  than  one 
account  with  the  same  title. 


22  ESSENTIALS  OF  BOOKKEEPING. 

HISTORICAL  BLNTRIES. 

The  historical  entry,  also  called  the  original  entry,  giving  the  items  pertaining  to  each 
transaction,  is  without  doubt  the  most  important  record  in  a  set  of  account  books.  The  entries 
that  follow  in  other  books  are  merely  for  the  purpose  of  classifying  the  results  that  grow  out 
of  the  original  entry. 

If  an  error  is  made  in  the  original  entry,  the  results  derived  from  such  entry  must  be 
wrong,  and  the  accountant  has  no  means  of  correcting  such  results,  unless  he  first  discovers  the 
error  in  the  original  entry,  which  he  may  never  do.  If  an  error  is  made  in  determining  or  re- 
cording results,  and  the  original  entry  is  correct,  the  latter  may  be  referred  to  at  any  time  and 
the  error  corrected. 

So  important  is  the  historical  entry  in  a  set  of  books,  that  it  alone  of  our  records  can  appear 
as  evidence  in  a  disputed  account.  If,  in  our  settlement  with  a  person  with  whom  we  have  had 
dealings,  our  account  is  disputed  and  the  case  is  submitted  to  a  court  for  decision  as  to  the  cor- 
rect balance,  our  historical  books  only  will  be  accepted  as  evidence,  and  they  only  on  certain 
conditions;  namely,  that  our  records  in  other  cases  than  those  under  dispute  can  be  proven 
correct,  that  the  records  were  written  at  or  near  the  time  of  the  transaction,  and  that  there  are 
no  signs  of  erasures  or  alterations  in  the  original  entries  in  question. 

To  meet  these  requirements,  and  to  make  a  set  of  record  books  that  would  inspire  confi- 
dence as  evidence  in  a  case,  we  would  suggest  that  the  student  observe  the  following: 

RULE.S  FOR  MAKING  HISTORICAL  E.NTRIES. 

1.  Use  a  uniform  style  of  describing  transactions  of  tJie  same  kind. 

2.  Use  brief  explanations.,  arid  yet,  make  them  plain  enough  to  describe  the  trarisactions  in- 
telligibly to  a  stranger. 

J.  In  recording  sales  on  account,  the  quantity  and  Price  of  each  item  should  be  given.,  and 
in  recording  purchases  on  account,  the  quantity  and  price  of  each  item  should  be  given,  unless  a 
bill  of  the  purchase  is  filed  away. 

^.     Every  original  entry  shoidd  be  made  on  the  day  on  which  the  transaction  occurred. 

5.  In  case  of  an  error  in  the  original  entry,  do  not  erase  or  interline,  but  mark  the  record 
"void,"  and  ivrite  a  new  one,  explaining  that  it  is  a  correction.  This  should  be  done  to  shoiv  the 
court  that  no  fraud  was  intended  by  the  change  of  record.  Erasures  or  corrections  may  occur  in  any 
records  except  original  entries. 

6.  Since  figures  obscurely  or  incorrectly  made  cannot  be  correctedby  the  surrounding  figures, 
as  letters  in  a  word,  great  care  sJiould  be  exerrised  in  xvriting  figures. 

J.  As  bookkeeping  affords  no  method  of  proving  original  entries  correct,  the  bookkeeper  must 
train  himself  to  absolute  accuracy  in  recording  such  entries. 

TRANSACTIONS. 

The  student  may  supply  the  business  address,  month,  and  year,  and  consider  the  numbers 
above  the  sections  as  days  of  the  month.  The  student  should  regard  himself  as  proprietor  of 
the  business,  and  his  name  should  appear  on  the  books  in  that  relation. 

In  opening  accounts  in  the  ledger,  give  each  account  one-fourth  of  a  page. 

[See  Illustrations  of  the  Day  Book,  Cash  Book,  and  Ledger,  on  pages  2j,  2^,  and  2j.) 

1 

Commenced  business  with  the  following  resources  and  liabilities  :    ■ 

Resources — Cash  ;^5 56.02,  a  stock  of  groceries  inventoried  at  ;$300,  and  a  balance  of  ac- 
count of  ;^200  due  from  R.  E.  Lee. 

Liabilities — Balance  of  account  favor  James  Dawes  $y$,  and  balance  of  account  favor  M. 
E.  King  ^150. 

Paid  cash  for  rent  of  store  room  one  month  $2^. 

Received  invoice  from  Hart  &  Co.,  Boston,  of  merchandise  bought  of  them  on  account, 
amounting  to ^236.95. 

Paid  cash  for  freight  on  above  invoice  $t,. 


SINGLE  ENTRY  FOR  RETAIL  MERCHANTS. 


23 


\^A  Page  of  the  Day  Book.'\ 


—  OL 


^"Cp  ct.-<i,JLy 


2 

S 

J 


-^, 


V£^ 


.^^ 


^. 


d-i^ 


^  (f.  (^^.^.J^ 


(o  ^'i-^^iPfC'dy. 


/(7 


^ 


& 


•V 


'^L-.    C</ ,  <^?7l^!e'?'?'i-j^t.^ 


2S- 


ssc 
So  o 

zo  c\ 


/  0 
s 
z 


02 


/  ^jr<^ 


oz 


Z2S^ 


Z3  C 


fs- 


32s 


yf 


9f 


^z- 


7 


S(7 


^y 


7 


sr 


24 


ESSENTIALS  OF  BOOKKEEPING. 


..^^^//^-r 


[  The  Left  Folio  of  the   Cash  Book^ 


J)a^    %^ 


/ 

z 

3 


J 


7 


s 


s- 


c^ 


J  s 

/  o 
J  f 

2  S 


'f 


0/ 


22 


/  (P  O 


■SJ 


J  ss 


02 


^Z 


s  f  / 


S¥ 


/  2V 


/^ 


\^An  Account  from  the  Ledger^ 


(y(^  (p.  ^£^^ 


/rf- 

/s-^- 

• 

/ 

cCJ<:t-iy  Cyc^-c^^^^ 

/ 

zoo 

Xl. 

^ 

-^cc^i.A^ 

2 

2S 

S 

• 

2 

3'0 

SO 

S 

Z 

2S 

/  ^  0 

So 

23  0 

SO 

2  3  0 

SO 

• 

SINGLE  ENTRY  FOR  RETAIL  MERCHANTS. 


v_^^,   7^^- 


\^TIie  Rig-ht  Folio  of  the  Cash  Book.~\ 


25 


/ 


3 


¥ 


S- 


^ 


¥ 


¥ 


^^/ 


91^ 


¥ 


2  s 

3 
/  ^  / 

/ 

/ 
ZS 


2S 


^7 
ss 


S'6> 


2  S 


i'^/ 


/6 


J-^/ 


[-^w  Account  from  the  Ledger 7\ 


y 

■U^a^dJ^^ 

J 

2  S 

Z^^- 

^ 

/ 

o£Uy^.^.^ 

/ 

2  3  (^ 

fs- 

¥ 

J 

/CO 

3 

., 

/ 

^f 

V 

c 

\yj     CLJL^tlL,^^-y-\--<Z^_^' 

J 

5  0 

tfif 

s 

2 

J^y 

^/y 

^¥ 

6/y 

vy 

* 

26  ESSENTIALS  OF  BOOKKEEPING. 


Sent  cash  per  bank  draft  to  the  Union  Woolen  Mills,  to  pay  for  an  invoice  of  cassimere 
and  flannel  amounting  to  I201.50,  on  which  they  have  offered  a  cash  discount  of  5  per  cent,  if 
the  invoice  is  paid  at  once.     Amount  sent  ^^  19 1.42. 

Paid  cash  for  exchange  on  above  draft  25  cents. 

Paid  cash  lor  freight  on  above  invoice  $1.']%. 

The  sale  tickets  for  the  day  show  cash  sales  amounting  to  ;?33.29. 

Paid  cash  for  cleaning  store  room  ^$2.50. 

3 

Sold  my  stock  of  groceries  to  M.  E,  King  for  ^325,  receiving  cash  to  apply  on  same  ;^  175, 
balance  on  account. 

Received  from  Hart  &  Co,  a  second  invoice  of  merchandise  bought  of  them  on  account, 
amounting  to  ;^49.49. 

•     Paid  cash  for  freight  on  last  invoice  ^1.50. 

Sent  Hart  &  Co.  cash  per  draft  to  apply  on  account  ;jg25,  also  paying  cash  for  exchange 
on  the  draft  10  cents. 

Sold  A.  E.  Blair  on  account  6  yds.  cassimere  @  95c,  10  yds.  bleached  sheeting  @  loc,  4 
yds.  eotton  flannel  @  20c. 

Bought  of  L.  A.  Kemp  on  account  200  ibs.  wool  @  27c.  Sold  him  on  account  10  yds. 
cashmere  @  ;^i,  25  yds.  cotton  flannel  @  20c,  43  yds.  print  @  6c. 

Cash  sales  today  per  tickets  amount  to  ;^54.oi. 

Paid  T.  Jenks  cash  for  100  ft)s.  wool  @  27c. 

4 

Sold  J,  Q,  Adams  10  yds.  cassimere  @  95c,  20  yds.  brown  sheeting  @  8c,  16  yds.  denim 
@  1 8c,  24  yds.  gingham  @  I25^c.  Received  of  him  cash  to  apply  on  the  purchase  ;^io,  bal- 
ance on  account. 

Bought  of  M.  E.  King  on  account  200  ibs.  wool  @  27c. 

Paid  cash  to  sundry  persons  for  1200  Sbs,  wool  @  27c. 

Bought  300  ibs,  wool  of  G,  A,  Hunter,  selling  him  sundry  merchandise  in  part  payment, 
and  giving  him  cash  $55,86  to  pay  the  balance. 

Shipped  to  the  Union  Woolen  Mills,  Clinton,  on  account  2000  ibs.  wool  (w,  30c. 

Paid  cash  for  freight  on  the  wool  ;^io. 

Cash  sales  today  per  tickets  amount  to  ;^38.22. 

Paid  Hart  &  Co.  cash  to  apply  on  account  ;$iOO, 

Received  cash  of  R.  E.  Lee  to  apply  on  account  $25. 

The  cash  in  drawer  and  safe  this  evening  amounts  to  $124.16.  [The  cash  book  should 
show  the  same  balance.] 

5 

Received  cash  of  the  Union  Woolen  Mills  to  apply  on  account  $100. 

Sold  R.  E.  Lee  on  account  20  yds.  cashmere  @  $1,  24  yds.  gingham  @  I2^c,  15  yds. 
flannel  @  50c. 

Received  invoice  from  Hart  &  Co.  of  merchandise  bought  of  them  on  account,  amounting 
of$388. 

Paid  cash  for  freight  on  last  invoice  $1.75. 

Paid  cash  for  drayage  to  date  $2.25. 

Paid  cash  for  premium  on  insurance  of  merchandise  $5- 

Paid  James  Dawes  cash  on  account  $25. 

Bought  of  H.  S.  Lowry  350  ibs,  wool  @  27c,  Paid  him  cash  to  apply  on  the  purchase 
$47,25,  balance  on  account. 

Bought  300  ibs.  butter  of  G.  W.  Simmons,  selling  him  sundry  merchandise  in  part  pay- 
ment, and  giving  him  cash  $39,52  to  pay  the  balance. 

Cash  sales  today  per  tickets  amount  to  $87.10. 

Received  cash  from>R.  E.  Lee  to  apply  on  account  $25. 


SINGLE  ENTRY  FOR  RETAIL  MERCHANTS.  27 


Sent  Hart  &  Co.  cash  per  draft  to  apply  on  account  t'^Q.  Also  paid  cash  for  exchange  on 
the  draft  10  cents. 

Received  cash  of  J.  Q.  Adams  to  apply  on  account  $%. 

Paid  M.  E.  King  cash  to  apply  on  account  ;$20.  • 

Paid  cash  for  suit  of  clothes  for  self  ^18.75. 

Received  cash  of  A.  E.  Blair  to  apply  on  account  $6. 

Sold  H.  S.  Lovvry  on  account  10  yds.  cashmere  @  ^i,  6  spools  thread  @  ^c,4i}4  yds. 
bleached  sheeting  @  loc,  43  yds.  print  @  6c. 

Received  cash  of  R.  E.  Lee  to  apply  on  account  ;^40. 

Cash  sales  to-day  per  tickets  amount  to  ^80.52. 

Paid  James  Dawes  cash  on  account  ;^20. 

Received  cash  from  the  Union  Woolen  Mills  to  apply  on  account  ;^i5o. 

Paid  L.  A.  Kemp  cash  on  account  $2$. 

Paid  cash  to  sundry  persons  for  400  flbs.  butter  @  20c. 

Shipped  to  Lee  &  Shepard,  New  York,  700  ibs.  butter  on  account  @  22)^c. 

Paid  cash  for  freight  on  the  butter  1^3.50. 

The  cash  in  safe  and  drawer  this  evening  amounts  to  ^279.66. 

The  student  may  close  all  accounts  in  the  ledger,  using  balance  entries  if  the  accounts  are 
not  already  in  balance. 

STATEMENTS. 

A  statement  is  a  summary  of  the  resources  and  liabilities,  showing  the  present  condition  of 
the  business,  and  comparing  this  with  the  condition  at  some  previous  time,  thereby  indicating 
the  progress  of  the  business. 

Resources  include  the  balances  which  others  owe  us  on  account,  the  balance  of  cash  on 
hand  and  in  bank,  other  people's  notes  and  written  obligations  payable  to  us,  and  the  values  of 
property  shown  in  our  inventory. 

Liabilities  include  the  balances  which  we  owe  others  on  account,  our  notes  and  written 
obligations  outstanding,  and  the  amounts  we  owe  as  shown  by  the  inventory. 

Inventories  are  taken  to  show  the  present  value  of  property  not  shown  on  the  account 
books.  The  ledger  in  Single  Entry  shows  the  balances  due  to  us  or  from  us  on  verbal  prom- 
ises, the  note  book  shows  the  balances  due  on  written  promises,  the  cash  book  shows  the  bal- 
ance of  cash  on  hand  ;  and  all  the  merchandise,  chattels  and  real  estate  on  hand  and  intei'est 
unpaid,  can  only  be  shown  in  either  Single  or  Double  Entry  by  the  inventory,  which  is  an 
itemized  list  of  such  property,  giving  the  quantity  and  present  value.  All  expenses  of  the  busi- 
ness prepaid,  such  as  unexpired  rent  or  insurance,  wages  paid  in  advance,  etc.,  are  also  re- 
sources which  can  only  be  shown  by  the  inventory. 

Sometimes  it  is  necessary  to  make  an  inventory  of  debts  not  shown  on  the  account  books, 
such  as  rents  due  and  not  yet  paid,  wages  due  workmen,  interest  due  and  unpaid. 

In  the  broadest  use  of  the  term,  the  inventory  is  a  list  of  resources  or  liabilities  not  shown 
on  the  account  books. 

In  making  statements,  care  should  be  exercised  that  they  do  not  give  an  inflated  showing 
of  the  business.  Personal  accounts  are  frequently  uncollectible,  and  notes  are  not  always 
good  for  their  face  value,  and  even  property  is  sometimes  inventoried  at  more  than  its  real  worth. 
The  statement  is  not  an  absolute  showing  of  our  worth,  as  it  merely  announces  our  worth,  pro- 
vided the  personal  accounts  are  all  good,  the  notes  all  collectible,  and  the  inventories  not  over- 
estimated. Some  firms,  in  making  statements,  deduct  a  certain  per  cent  from  their  unsecured 
accounts  and  notes,  their  experience  in  dealing  with  a  certain  class  of  traders  enabling  them  to 
approximate  closely  to  the  actual  shrinkage  of  these  values.  We  cannot  give  any  standard  rate 
at  which  to  discount  these  values,  as  the  shrinkage  depends  mainly  on  the  caution  used  by  the 
firm  in  giving  credit  to  others,  and  in  their  promptness  in  urging  collections. 

Merchants  and  stock  companies  usually  make  a  statement  of  their  business  once  a  year, 
although  some  make  statements  as  often  as  every  three  or  six  months.      At  the  beginning  of 


28  ESSENTIALS  OF  BOOKKEEPING. 

the  statement  should  be  recorded  the  name  of  the  firm  whose  business  is  represented,  and  the 
date  when  the  statement  is  rendered. 

The  resources  are  arranged  together  and  their  sum  taken,  which  shows  the  entire  property 
of  the  firm.  Tlie  liabihties  are  also  classified  together  and  their  sum  deducted  from  the  total 
resources,  flowing  the  remainder  as  the  real  value  of  the  firm,  called  its  Present  Worth  or  Net 
Worth.  If  the  business  has  been  adverse  to  such  a  degree  that  the  liabilities  exceed  the 
resources,  the  excess  of  the  liabilities  is  called  the  firm's  Net  Insolvency.  It  is  evident  that  if 
the  present  worth  is  greater  than  the  amount  invested,  the  difference  must  be  a  gain,  and  if  the 
present  worth  is  less,  the  difference  must  be  a  loss. 

The  sources  of  information  from  which  the  statement  is  arranged  are  the  following: 

Lcdg-er. —  If  the  debtor  side  of  an  account  is  the  larger,  the  excess  will  be  a  resource.  If 
the  creditor  side  is  the  larger,  the  excess  will  be  a  liability. 

Cash  Book. — If  the  received  side  is  the  larger,  the  excess  will  be  a  resource.  The  paid 
side  of  cash  may  be  equal  to  the  received,  but  it  can  never  properly  be  larger,  because  the 
merchant  cannot  pay  out  more  money  than  he  has  had  on  hand,  unless  the  cash  account 
includes  his  transactions  at  bank  and  he  is  allowed  to  overdraw  his  bank  account,  in  which 
case  the  credit  balance  would  be  a  liability  due  the  bank.  "^ 

Note  Book. — Olher  people's  notes  in  our  favor  still  unpaid  are  resources.  Our  notes 
still  outsranding  are  liabilities. 

Inventory. — All  property  on  hand,  such  as  real  estate,  merchandise,  chattels,  stocks  and 
bonds,  interest  receivable  and  expenses  prepaid,  if  estimated  at  their  market  value,  are  resources. 
Expenses  and  interest  payable,  and  other  obligations  not  shown  on  our  books,  are  liabilities. 

In  making  a  statement  at  the  close  of  Set  Two,  the  student  will  find  all  of  the  facts  required 
except  the  inventories,  in  the  cash  balance,  the  ledger  balances,  and  the  opening  day  book 
entry. 

The  following  results  appear  in  the  inventory :  Unsold  merchandise  at  cost  price  amounts 
to  ;^546.95,  350  lbs.  wool  on  hand  is  worth  27  cts.  per  pound,  and  the  unexpired  rent  and  pre- 
paid insurance  amount  to  $15.     (See  Illustrated  Statement  on  page  29/) 

RUL^S  RELLATING  TO   STATELMILNTS. 

/.  To  find  the  Present  Worth,  subtract  the  total  liabilities  from  the  total  resources. 

2.  To  find  the  Net  Insolvoicy,  subtract  the  total  resotirces  front  the  total  liabilities. 

J.  To  find  the  Net  Gain^subtract  the  net  capital  at  co})iniencing'froni  the  present  xvorth. 

4.  To  find  the  Net  Loss,  subtract  the  present  zuorthfroni  the  net  capital. 

5.  To  find  the  Net  Capital,  subtract  the  liabilities  invested  from  the  resources  i)tvested. 

PRACTICE  IN  STATEMENTS. 

The  student  may  rule  pages  of  paper  and  write  statements  from  the  following  examples : 

I. 
A  merchant  commenced  business  with  a  capital  of  52,000.     At  the  end  of  six  months  his 
books  show  the  following : 

RESOURCES, 

Ledg'er. — Balance  due  from  A.  B.  ;^300,  balance  due  from  C.  D.  ;^25o,  balance  due  from 
E.  F.  ;^3  50,  balance  due  from  G.  H.  ;^ioo.  » 

Cash  Book. — Balance  of  cash  on  hand,  ^  1,5  50. 
Note  Book. — Notes  on  hand  unpaid  $750. 
Inventory. — Merchandise  unsold  amounts  to  ;^750. 

LIABILITIES. 

.  Ledg-er. — Balance  due  J.  K.  ;^300,  balance  due  L.  M.  ^250. 
Note  Book. — Notes  outstanding  ;$750. 

Inventory. — The  merchant  owes  for  unpaid  rent  $75,  for  clerk  hire  ^42. 50. 
Give  the  present  worth,  and  the  gain  or  loss. 


SINGLE  ENTRY  FOR  RETAIL  MERCHANTS. 


29 


-  \^i^  &,  /^f- 


Or   0  ■  ^iLe-e^ 


if^,    ^.^ L'i^'y^^ 


.J-^ 


/  ^O 

/ 

J  5  (7 


VS' 


/sy 


s^ 


SVC 

fv 
/  s 


fS 


so 


3  ¥ 
/  / 


¥¥ 
¥Z 
Z2 


/  (PS  6 
22s 


oz 


&s  / 

2  7^^ 


C,J  c. 


/  S  8^-/  S^ 


C  0  S  .OS' 


/ 


8-  2  sy 


^3  / 


02 


/^  y 


vf 


30  ESSENTIALS  OF  BOOKKEEPING. 

II. 

A  merchant  invested  in  business  $6,000.  At  the  end  of  one  year  his  books  and  inventory 
showed  the  following  results: 

Lcdocr. — Herbert  Mann  Dr.  $S7S^  Cr.  ^$225;  James  Johnson  Dr.  $275,  Cr.  $S^S\  G.  Lam- 
bert Dr.  $375;  M.  Stafford  Dr.  $495,  Cr.  $645;  C.  Harter  Dr.  $775,  Cr  $325;  C.  I.  Mason  Dr. 
$342,  Cr.  $592. 

Cash  Book. — Cash  received  $13,295,  paid  $12,145. 

Note  Book.-^Notes  receivable  received  $2,750,  disposed  of  $1,925;  Notes  payable  issued 
$1,750,  redeemed  $1,250. 

Inventory. — Value  of  store  room  $1,500,  merchandise  unsold  $1,250,  insurance  prepaid 
$15;  accrued  interest  on  notes  payable  $27.50,  one-half  month's  wages  due  the  bookkeeper  at 
$50  per  month. 

What  is  the  present  worth,  and  the  gain  or  loss. 

III. 

A  man  rented  a  farm  and  began  the  work  of  the  year  without  capital.  At  the  end  of  the 
year  he  had  the  following  resources  and  liabilities : 

He  owes  the  grocer  $35.64,  the  merchant  $54.25,  the  blacksmith  $23.62,  the  shoemaker 
$25.25.  The  miller  owes  him  for  wheat  $75,  the  butcher  owes  him  (or  i  cow  $40,  his  neighbor 
owes  him  for  wages,  $32.75.  He  has  cash  on  hand  $57.39.  He  had  given  notes  for  a  team 
$375,  and  for  2  cows  $75,  and  has  since  paid  on  these  notes  $150.  He  now  has  a  team  worth 
$390,  cow  and  calf  worth  $50,  2  colts  worth  $85,  poultry  worth  $35,  and  farm  products  on 
hand  worth  $275. 

He  still  owes  on  farm  rent  $1  25.  How  much  is  he  now  worth,  and  what  is  his  gain  beside.s 
his  living  expenses  for  the  year  ? 

IV. 

A  man  failed  in  business  and  began  anew  with  no  capital  but  his  experience  and  with 
liabilities  from  former  business  $775.  At  the  end  of  a  year  his  books  show  the  following  results: 
Due  from  persons  on  account  $625,  due  to  persons  on  account  $1,250,  merchandise  on  hand 
$1,395,  store  room  $3,750  on  which  there  is  a  mortgage  securing  his  notes  payable  for  $3,250, 
accrued  interest  on  the  notes  $242.50.  He  has  cash  on  hand  $27.25  and  in  bank  $125.25.  He 
owes  the  bank  on  his  note  discounted  there  $650.     What  is  he  worth  and  what  has  he  gained? 


QUILSTIONS  FOR  REVIEW. 

I.  What  accounts  are  usually  kept  in  Single  Entry,  and  what  books  are  used?  2.  What 
transactions  are  recorded  in  the  cash  book?  3.  What  distinction  is  made  in  recording  cash 
entries  that  apply  on  account,  and  those  not  applying  on  account?  4.  What  is  the  office  of 
the  day  book?  5.  How  are  transactions  on  account  recorded  in  the  day  book?  6.  What 
is  the  office  of  the  ledger  ?  7.  In  what  does  a  ledger  differ  from  a  complete  account 
book?  8.  What  is  the  process  called  posting?  9.  From  what  books  are  the  ledger  ac- 
counts posted  ?  10.  What  date  is  posted  in  the  ledger  entry?  i  r.  What  is  written  in  the 
explanation  column  of  the  ledger  account  ?  12.  What  is  written  in  the  page  column  ?  13. 
What  postmark  is  used  in  the  historical  books  to  indicate  that  entries  have  been  posted  to  the 
ledger?  14.  How  are  ledger  accounts  indexed?  15.  In  opening  up  a  new  set  of  books, 
what  record  should  first  be  made?  16.  How  should  the  investment  in  business  be  recorded? 
17.  What  should  be  done,  after  entry  in  the  day  book,  with  balances  of  account  invested  from 
a  former  business?  18.  Where  should  we  note  the  address  of  persons  having  accounts  in  our 
ledger?  19.  When  should  such  address  be  given  ?  20.  What  record  is  made  of  invoices 
of  merchandise  bought  at  wholesale?  21.  What  entries  should  itemized  in  the  daybook? 
22.  What  is  meant  by  a  historical  or  original  entry?  23.  Is  the  original  entry  more  import- 
ant than  the  ledger  entry  ?  24.  If  so,  why?  25.  When  should  sales  be  itemized  ?  26. 
When  should  purchases  be  itemized  ?  27.  In  correcting  an  error,  is  it  safe  to  erase  any  part 
of  an  original  entry?  28.  Can  a  ledger  entry  be  erased  and  corrected?  29.  What  is  a 
statement?  30.  What  does  the  term,  resources,  include?  31.  What  does  the  term,  liabili- 
ties, include  ?  32.  Of  what  does  an  inventory  consist  ?  33.  How  may  we  guard  against 
the  showing  of  fictitious  or  inflated  values  in  a  statement?  34.  How  often  are  statements 
usually  made?  35.  What  is  the  present  worth  of  a  firm  ?  36.  When  is  a  firm  said  to  be 
insolvent?     37.     How  may  the  net  gain  be  found  ?     38.  How  may  the  net  loss  be  found  ? 


SINGLE  ENTRY  FOR  PA R  TNERSHIP  A  CCO  UNTS.  3 1 


SET  THREE,. 

SINGLE  ENTKY  FOR  PARTNERSHIP  ACCOUNTS. 

Ill  recording  a  partnership  business,  the  day  book  should  begin  with  an  account  of  the 
partnership  agreement,  after  which  each  partner  sliould  be  credited  with  his  resources  invested, 
and  debited  with  his  liabilities  assumed  by  the  firm. 

In  case  one  of  the  partners  makes  only  a  cash  investment,  the  entry  could  be  omitted  from  the 
day  book,  and  be  posted  from  the  cash  book;  but  being  a  part  of  the  investment  record,  it  would 
seem  advisable  to  give  it  a  place  in  the  day  book. 

If  cash  received  or  paid  on  account  is  entered  in  both  day  book  and  cash  book,  the  words 
"  Day  Book  "  should  be  written  in  the  prominent  place  in  the  cash  book,  instead  of  the  person's 
name,  indicating  that  the  entry  will  be  posted  from  the  day  book,  and  not  from  the  cash  book. 
In  case  an  account  is  settled  in  full,  part  being  paid  in  cash  and  the  balance  being  discounted, 
the  entire  entry  should  appear  in  the  day  book,  the  discount  being  debited  or  credited  along 
with  the  cash. 

The  first  debit  in  the  cash  book  on  page  36,  and  the  tenth  credit  on  page  37,  illustrate  cash 
entries  that  appear  also  in  the  day  book.  The  sixth  entry  on  page  34  illustrates  the  method  of 
entering  cash  and  discount  in  the  day  book. 

It  is  customary  for  wholesale  merchants  to  offer  a  cash  discount  with  each  invoice  they 
send  out,  if  the  same  is  paid  within  a  specified  time,  and  the  prosperous  retail  merchant  will 
watch  these  offers  and  pay  his  bills  within  the  specified  time,  in  order  to  receive  the  discount. 
The  discount  rate  and  the  discount  period  are  not  uniform,  changing  with  different  firms  and 
on  different  classes  of  goods;  hence,  the  merchant  needs  to  keep  a  careful  record  of  his  dis- 
count offers. 

The  second  entry  on  page  34  illustrates  a  good  method  of  recording  discount  offers  in  the  day 
book,  and  the  same  entry  posted  to  the  ledger  on  page  38  illustrates  the  method  of  recording  dit>- 
covint  offers  in  the  ledger. 

Debits  and  credits  are  posted  from  the  cash  book,  the  same  as  in  the  preceding  set.  If  a 
part  of  the  cash  is  deposited  in  bank,  and  some  of  the  payments  are  made  by  check  on  the 
bank  and  others  by  cash,  it  would  be  convenient  to  use  separate  columns  in  the  cash  book  for 
the  bank  transactions.  The  second  one  of  the  received  columns  can  be  used  for  recording  de- 
posits in  bank,  and  the  second  of  the  paid  columns  for  payments  by  check.  The  first  column 
on  each  side  will  show  cash  receipts  and  payments,  and  the  balance  between  these  columns  will 
show  cash  on  hand,  while  the  balance  between  the  deposit  and  check  columns  will  show  the 
cash  in  bank,  or  the  balance  due  the  bank,  if  the  checks  exceed  the  deposits. 

Sometimes  small  amounts  of  cash  are  received  or  paid  out,  and  tickets  or  entries  for  the 
same  are  forgotten.  In  such  case  the  cash  in  the  money  drawer  will  fail  to  agree  with  the  bal- 
ance shown  in  the  cash  book,  and  such  discrepancy  can  best  be  shown  by  the  entry  "  Not 
accounted  for,"  with  the  amount  of  the  discrepancy  in  the  proper  column,  leaving  the  balance 
of  cash,  as  shown  in  the  cash  book,  equal  to  the  cash  in  drawer  or  safe.  This  entry  can  be 
written  with  a  pencil,  and  afterward  erased  and  the  transaction  properly  described,  if  discovered 
after  the  account  is  balanced. 

The  model  cash  book  on  pages  36  and  37  illustrates  the  use  of  cash  and  bank  columns  and  the 
method  of  recording  cash  on  hand  and  not  accounted  for. 

The  note  book  illustrated  on  pages  36  and  37  is  the  standard  form  adapted  to  either  single 
or  double  entry.  Other  columns  may  be  added,  adapting  the  note  book  to  special  forms  of 
double  entry  bookkeeping.  There  should  be  a  column  for  the  date  when  the  note  is  used  in 
the  business,  and  another  column  for  the  date  of  the  note,  as  these  two  dates   are  sometimes 


32  ESSENTIALS  OF  BOOKKEEPING. 

different.  Another  column  should  contain  the  number  of  each  note,  the  notes  being  numbered 
in  the  order  that  they  are  issued  or  received.  Other  columns  should  contain  the  name  of  the 
maker  or  signer,  the  name  of  the  person  to  whom  the  note  is  payable,  for  what  the  note  was 
given  or  received,  where  it  is  payable,  the  term  of  payment,  when  due  with  special  columns  for 
each  month,  the  amount  or  face  of  the  note,  the  rate  of  interest,  and  a  column  for  recording 
when  and  how  the  note  is  disposed  of. 

Three  days  longer  than  the  term  of  credit,  called  days  of  grace,  are  usually  allowed  on  all 
notes  before  they  are  considered  legally  due,  the  legal  date  due  being  recorded  in  the  note  book. 
Some  states  have  dispensed  with  days  of  grace,  making  the  note  fall  due  at  the  expiration  of  the 
term  named.    In  our  computations  in  this  text  we  have  allowed  days  of  grace  on  notes  and  drafts. 

An  accepted  draft  creates  the  same  responsibility  as  a  note.  The  person  accepting  a  draft 
makes  a  promise  to  pay  the  draft  according  to  its  terms.  If  it  is  payable  a  certain  time  after 
sight,  the  time  when  it  is  seen  and  accepted  gives  it  date  as  a  promise,  and  its  time  to  run 
counts  from  the  date  of  acceptance.  If  the  draft  is  payable  a  certain  period  after  date,  the  time 
of  acceptance  would  not  affect  the  maturity  of  the  draft.  If  a  note  has  been  given  or  a  draft 
accepted  to  apply  on  account,  the  transaction  should  be  entered  in  the  day  book,  before  being 
posted  to  the  ledger.  A  note  or  accepted  draft  received  from  a  person  to  apply  on  account, 
should  credit  that  person;  and  a  note  or  accepted  draft  given  to  a  person  to  apply  on  account, 
should  debit  that  person. 

Some  bookkeepers  post  such  debits  and  credits  directly  from  the  note  book  to  the  ledger;  but, 
unless  such  transactions  occur  frequently,  they  are  liable  to  be  overlooked  in  posting  the  ledger. 

The  day  book,  cash  book,  note  book,  and  ledger  should  be  used  in  recording  the  following 
transactions.     Each  account  should  have  one-fourth  of  a  page  in  the  ledger. 

TRANSACTIONS. 

OCT.  4,  189  — 

The  student  and  Harvey  Patterson  have  this  day  entered  into  partnership  as  dealers  in 
groceries  and  produce,  under  the  firm  name  of  (Student)  &  Patterson,  each  investing  an  equal 
amount  and  sharing  equally  in  gains  and  losses. 

The  student  has  invested  a  stock  of  groceries  inventoried  at  $\  5347  5,  a  horse  and  wagon 
for  delivering  goods  valued  at  ;$250,  and  the  following  ledger  balances  from  city  customers  and 
country  dealers  considered  responsible:  H.Emery,  No.  139  Fourth  avenue,  $\2.'-^o\  Myron 
Jones,  No.  129  Sixth  street,  ^37.75;  Charles  Trenton,  No.  232  Fifth  street,  ^35.25;  O.  Sherman, 
dealer  at  Riverside,  ;^7.5o;  E.  C.  Martin,  dealer  at  Stanton,  ;^54.25. 

The  student  owes  the  following  balances  of  account,  which  the  firm  has  assumed  to  pay: 
Meade  &  Morton,  St.  Louis,  ^$175;  Archer  &  Parton,  Chicago,  ^268.50. 

Harvey  Patterson  has  invested  cash  ;^  1488.50. 

Deposited  cash  in  bank  ^1400. 

Gave  check  to  H.  O.  Pratt,  to  pay  rent  of  store  room  to  Nov.  r,  ;^50. 

5 

Bought  of  R.  Newland,  a  market  gardener,  on  account,  20  bu.  polatocs  @  40c,  100  heads 
cabbage  @  5c. 

Paid  cash  for  sundry  produce  ^8.50. 

Sold  Charles  Trenton  on  account  20  ft)s.  A  sugar  @  6c,  5  Bbs.  Rio  coffee  @  20c,  j^  bu. 
potatoes  @  50c. 

Received  for  cash  sales  today  ;^37. 75.  '* 

Received  cash  of  H.  Emery  in  full  of  his  account  ;^I2.50. 

Received  invoice  of  groceries  from  Archer  &  Parton,  amounting  to  $350.50,  with  an  offer 
of  3  per  cent  cash  discount,  if  paid  within  10  days. 

Gave  check  to  the  Commercial  Railway  to  pay  freight  on  last  invoice,  ;^  10.75. 

Deposited  cash  in  bank  $50. 

[transactions  continued  on  page  35.] 


SINGLE  ENTRY  FOR  PARTNERSHIP  ACCOUNTS. 


53 


S 


yPirst  Pag-c  of  I  he  Day  Book^ 


2^, 


i^-^-z-^-ciX 


0,  ■^.  ^^.^^'i-^t'^^T^^  „ 


/  i- 

3 

'JJ\ 


7 

j5V 


/^ 


// 


J" 


/  f  32 


.je:^<7!-t:^cyl^ty<~£^  L.J^C^uCZ-<>L<£-tP--T^ 


-y^-Ay. 


■.'^L'Ce-'Ci^ 


/i9  0 


.OS- 


//5 
2  (>S'  SO 


s 


¥VJ 


SO 


/  ^S'S'SO 


/  3 


34 


ESSENTIALS  OF  BOOKKEEPING. 


\_Second  Pag'e  of  the  Day  Book^ 


j/z.  .y^-u,^.  Oi^^^«^^h-^t-dy                           .so 

/ 

Z(7 
IS 

2 

3S  0 

■ 
2  2 

/  Z7 
3S  0 

/  /  2 
¥ 

S 

¥S 

2 

id 
S'O 

SO 

6 

2c:J  c:C<^.    0<^^t^L-<ty                                         ./3 

^0 

/  2 
/  0 

S(P 

2  5-         ..             6i,<t^A^^                           .^£? 

SO 

S3f 

7^ 

S2 

so 

so 

2 
2 

so 

2 

3J 
SO 

/£?  ^^z^d^A.^^^  ^yyyt.c^.^.<iy              .  J3'<3 

s-j 

■ 

SINGLE  ENTRY  FOR  PARTNERSHIP  A  CC0UN7S.  35 

6 

Received  from  O.  Sherman  20  doz.  eggs  @  13c,  120  lbs.  butter  @  140,  for  which  we  have 
given  him  credit  to  apply  on  account. 

Received  from  Norton  &  Quinn,  Chicago,  billed  to  us  on  account,  50  baskets  grapes  (^t)  25c, 
25  baskets  peaches  (Oj^  40c. 

Paid  cash  for  express  charges  on  grapes  and  peaches,  ^4. 

Received  an  invoice  of  groceries  from  Mead  &  Morton,  amounting  to  ;^  127.50,  billed  on 
account  with  an  offer  of  5  per  cent  cash  discount  if  paid  within   20  days. 

Gave  check  to  the  Commercial  Railway  to  pay  freight  on  last  invoice  ^7.50. 

The  student  has  drawn  out  cash  for  personal  use  $2^. 

Paid  cash  for  sundry  produce  ^17.50. 

Received  for  cash  sales  today  ;^95.37. 

Sent  our  check  for  ^339.98  to  Archer  &  Parton  to  pay  for  their  invoice  credited  5th  inst, 
after  deducting  the  cash  discount  offered  by  them.  [Such  a  transaction  should  be  entered  in 
the  day  book,  debiting  Archer  &  Parton  for  the  check  and  the  discount,  after  which  the  check 
should  be  entered  in  the  cash  book.] 

Paid  cash  for  cleaning  store  room  ;^3. 

Received  a  carload  of  potatoes  from  C.  Crisman,  of  Leesburg,  450  bushels  @  25c,  billed 
to  us  on  account. 

Gave  a  check  to  the  Commercial  railway  to  pay  freight  on  the  potatoes,  $'^6. 

Sold  peaches  at  50  cts.  per  basket,  and  grapes,  at  33)3  cts,  per  basket  today  to  city  deal- 
ers on  account :  Reed  &  Young,  No.  26  First  avenue,  6  baskets  grapes,  4  baskets  peaches ; 
Smith  &  Lee,  No.  34  Second  street,  lobaskets  grapes,  5  baskets  peaches;  Charles  Marvin,  No. 
39  First  avenue,  8  baskets  grapes,  4  baskets  peaches ;  Henry  Carter,  No.  32  Second  avenue,  12 
baskets  grapes,  5  baskets  peaches. 

Received  cash  of  Myron  Jones  to  apply  on  account  $2^. 

Deposited  cash  in  bank  ^140. 

The  cash  in  drawer  this  evening  amounts  to  ;^i  2.56,  which  makes  ;^i.44  cash  received  and 
not  accounted  for  on  the  tickets.  The  pass  book  shows  deposits  amounting  to  ;^I590,  and  the 
check  book  shows  checks  issued  amounting  to  ^444.23. 

Received  from  Norton  &  Quinn  on  account  50  baskets  peaches  @  37>^c,  40  baskets 
grapes  @  25c. 

Gave  a  check  to  the  Commercial  Railway  for  freight  on  peaches  and  grapes  ;^5. 
•   Sold  Reed  &  Young  on  account   30   bu.  potatoes   @  40c,    12  baskets  peaches  @  48c,  8 
baskets  grapes  @  33/^^-      Received  cash  from  them  to  apply  on  account  ^5. 

Sold  E.  C.  Martin  on  account  50  bu.  potatoes  @  40c;  and  received  his  note  at  ten  days  in 
our  favor,  payable  at  our  bank,  for  $jO  without  interest,  to  apply  on  account. 

Bought  of  R.  Newland  on  account  20  squashes  @  I2%c,  10  bu.  turnips  @  30c.  Sold  him 
on  account  20  lbs.  bro.  sugar  @  6c,  5  lbs.  Rio  coffee  @  20c,  i  lb.  Japan  tea  @  70c,  4  lbs.  soap 
@  6%;c. 

Received  cash  of  Charles  Trenton  to  apply  on  account,  ;^20.  Sold  him  on  account  i  sack 
flour  @  ,^1.70,   I  basket  peaches  @  75c,  2  lbs.  corn  starch  @  I2c. 

Sold  Smith  &  Lee  on  account  20  bu. potatoes  @  40c,  8  baskets  peaches  @  48c,  15  baskets 
grapes  (6^  33/f  c. 

Gave  O.  Sherman  a  check  for  ^10  to  apply  on  account.  Sold  him  on  account  12  baskets 
grapes  Qj^  33/^c,  20  baskets  peaches  @  45c. 

Received  for  cash  sales  today  ^71.25. 

Sold  Charles  Marvin  on  account  30  bu.  potatoes  @  40c. 

Paid  cash  for  postage  and  stationery  ^2.25. 

Plarvey  Patterson  has  taken  sundry  groceries  on  his  private  account,  amounting  to;^6.85. 

Sold  Henry  Carter  on  account  20  bu.  potatoes  @  40c,  5  baskets  peaches  @  48c. 

Deposited  cash  in  bank  $go. 

[transactions  continued  on  page  39.] 


36 


ESSENTIALS  OF  BOOKKEEPING. 


(9a. 


\_The  Left  Folio  of  the   Cash  Book^ 

'^i^l.^d-.-A^  ^P^^-T.^.-c:^  Cyfc^^ 


-i^  <«-<t-i^<^  ^f^Ji^-T.'^^^ 


^ 


s 


7 


/VZ^L^^L^yi^cp->'T^i/c>n'-T^c<^  cTT-t^  u^czy 


/  ^?-  S' 


^c 


L>7^£-<^2-*'Z-<i^-<2i^^ 


^7/ 

/  Z 


/  i  C6^& 


/  2. 


V 


4^4- 


SC 


/  ^C?  (? 


SO 


/  ^<? 


/  SfO 


/  /  ^s 


7/ 


NOTES  a:sd  bil,t.s. 


Date  Recorded.         No 


MAKER 


WHOSE  FAVOR. 


FOR  WHAT.     WHERE  PAY. 


7     / 
ik  ^ 


yO'^d-..<>z:ijL-^\y^^  y<Q^. 


i;^  C=C.'>--v-fe-- 


NOTES  AND  BILl^S. 


Date  Recorded. 


WHOSE  FAVOR 


FOR  WHAT 


WHEKE  PAY 


«^l-tc^<-^<?Le,t-'i-/"  yXtLft 


/O 


// 


1^. 


C^L-<.^C^rx</'^-UK 


SINGLE  ENTRY  FOR  PARTNERSHIP  ACCOUNTS. 


37 


a-/. 


/^f- 


[  T/ic  Ri§iit  Folio  of  the  Cash  Book:] 


i-l 


s 


( ^r^^-e-c-ijs-^C^^^  ^'-^--T-^  cy^-^^::z-^ 


/  ¥-0  a 

8- 

2  J 

// 

3 

/  ^0 

/  2 


50 


j-o 


kT^ 


/   C    d>6^^ 


6  O 


/  O 


7 


jjf 


3  (. 


/    /    ^/vT 


/jTf  ^ 


/ 


S 


SO 


7^ 


7-^ 


l^ECEIVABtB. 

Date 

Term 

-Whkn  Due 

12 

1 

AMOUNT 

Int. 

Mos 

Days. 

Years. 

I 

2 

3 

4 

S 

6   1    7 

8 

9 

10 

It 

Disposed  of. 

frf^ 

- 

acJr- 

7 

/  0 

/rf- 

AC 

7' 

iyj 

-  10 
f  o 

3o 

(oO 

//  • 

/o 

/.; 

Zoo 

(oyo 

(CU^  /3(jLj^ 

'. 

/  o 

1 

'/ 

/3 

S-Tc 

OJIr 

'  // 

±C 

1/ 

3 

J-c 

f»AKA  BI^E. 


f  o 
/  0 

II 


Term- 


Mos!     X)ay!       7iar3      Tl      2]      3]      4!      5]     o 


/(9 
l<5- 


/<r/' 


lu       II         12 


Int. 


When  and  How 

dSPOSBD  OF. 


S~0 
6~o 

7^ 


\(n^/3CLu 


38" 


ESSENTIALS  OFBOOKKEEPING. 


---^£-^>!?Z^i-^Z^^^^ 


/^ 

■ 

/«rf_ 

6^ 

c> 

-Y:?ci.^y 

7 

25 

6U. 

^ 

i^Cy^t^UY  Ofc^t:>'^^ 

^ 

/  ¥^? 

50 

' 

^ 

<!'CUci^  CAcrtr^^ 

s 

7 

ZS 

/3 

yz  ^^^^^.^.^^ 

/  0  / 

f^ 

iZ 

"^£X-ii<«^ 

7 

20 

7^ 

■ 

/3 

C^<;<_-C^-ja-'t--t--c  ^  ^ 

/  S  2  9 

L^uf 

t 

^.^...^.^ 

/^  f  £> 

yy 

/  S yff\i/¥ 

1 

(Pa. 

/3 

/  S  2^  ^^ 

./X 


''/<     QP^T-T'-T^-U^^ ,     /J'y  <^^ c'-t..<.yt^A/r^    uCi^-K 


/3 

a47ecy  Ofcrr^--^ 

6. 
f 

/  2  , 

— ( 

! 

/3 

-(^ccd-JT-y 

C> 

" 1 

/  2 

sa 

■ 

/ 
/ 

.3 

3J~ 

J 

^s 

J 

3S 

6^ 

/J. 

1 
J 

3-5 

<L'/S--^.<^^41<i>^    ^'^— -<^^^^^E.---^/^^^V>^^  "i^^^^-i^Coo.s:?:-^ 


// 


/o' 


J5  0 
/  a  0 
/ 1^? 

1  /  J" 


?  3  ^  ¥S 


50 


50 


L^S^ 


CCo/ 


/2 

/J 


6^, 


/ 


2  ^<!? 
/  2  O 

S  39 

2  /  J 


SO 
50 
10 
2S 

vs 


SINGLE  ENTRY  FOR  PARTNERSHIP  ACCOUNTS.  39 


Sent  our  note  at  lo  days  for  ;^  175  to  Mead  &  Morton  to  apply  on  account. 

Bought  of  O.  Sherman  on  account  2  doz.  spring  chickens  @  $A,\  a«d  sold  him  on  account 
25  bu.  potatoes  @  40c. 

Received  from  Mead  and  Morton  an  invoice  of  groceries  amounting  to  ;^76.8o,  billed  on 
account  with  an  offer  of  4  per  cent  cash  discount  if  paid  within  10  days. 

Gave  a  check  to  the  Commercial  Railway  to  pay  freight  on  last  invoice  ;^4.5o. 

Received  from  Norton  &  Quinn  on  account  40  baskets  peaches  @  35c,  30  baskets  grapes 
@  20c. 

Paid  cash  for  express  charges  on  peaches  and  grapes  ^3.90. 

Sold  Myron  Jones  on  account  2  Bbs.  Rio  coffee  @  20c,  yi  gal.  syrup  @  60c,  4  ifes.  butter 
@  1 6c. 

Accepted  Norton  &  Quinn's  draft  on  us  at  5  days'  sight  for  the  amount  of  their  invoice 
credited  6th  inst.,  the  draft  being  drawn  payable  to  their  own  order.  [Enter  in  notes  payable, 
and  debit  Norton  &  Quinn  in  the  day  book.] 

The  student  has  taken  sundry  groceries  on  his  private  account  amounting  to  $().2^. 

Harvey  Patterson  has  drawn  out  cash  per  check  ;^  19.50  on  his  private  account. 

Sold  PI  C.  Martin  10  baskets  peaches  (g)  45c,  5  baskets  grapes  @  28c;  receiving  cash  to 
apply  on  same  ^4,  balance  on  account. 

Sent  Archer  &  Parton  our  check  to  apply  on  old  account  ;^ioo. 

Sold  Reed  &  Young  on  account  5  baskets  peaches  @  45c,  10  baskets  grapes  @  28c. 

Paid  R.  Newland  cash  on  account;^  10 ;  and  bought  of  him  on  account  3  bu.  sweet  pota- 
toes @  ^1.50. 

Sold  Smith  &  Lee  on  account  12  baskets  peaches  @  45c,  10  baskets  grapes  @  28c;  and 
received  cash  from  them  to  apply  on  account  ;$20. 

C.  Crisman  has  drawn  on  us  for  ^50  payable  at  sight,  to  apply  on  acco-.mt,  and  we  have 
given  our  check  to  pay  the  draft. 

Received  for  cash  sales  today  $'j'/.6o. 

Deposited  cash  in  bank  ^100. 

Cash  in  drawer  tonight  ;^4.26.     Balance  in  bank,  $\  146.77. 

10 

Sold  H.  Emery  on  account  5  Jbs.  dressed  chickens  @  15c,  4  Bbs.  butter  @  i6c,  i  bu.  pota- 
toes @  50c. 

Sent  our  check  for  Ji5i  21.12  to  Mead  &  Morton  to  pay  their  invoice  credited  6th  inst.,  after 
deducting  the  cash  discount  offered  by  them.     [Day  book  and  cash  book.] 

Received  cash  of  Charles  Trenton  to  apply  on  account  $^. 

Received  from  Norton  &  Quinn  on  account  50  baskets  peaches  @  30c,  50  baskets  grapes 
@  20c. 

Gave  check  to  the  Commercial  Railway  for  freight  on  peaches  and  grapes  I3. 

Sold  R.  Newland  on  account  4  baskets  peaches  @  50c,  20  lbs.  G  sugar  @  7c,  5  gal.  kero- 
sene @  1 6c,  2  gal.  vinegar  @  30c.     Also  paid  him  cash  to  apply  on  account  $4. 

Bought  of  C.  Crisman  on  account  250  bbls,  apples  @  ;^i.50. 

Gave  check  to  the  Commercial  Railway  for  freight  on  same  $50. 

Paid  cash  for  drayage  on  the  apples  ^8. 

Sent  out  note  at  20  days  for  ;^62.50  to  C.  Crisman  to  apply  on  account. 

Received  cash  from  Henry  Carter  to  apply  on  account  ;^i5;  and  sold  him  on  account  10 
baskets  peaches  @  40c,  15  baskets  grapes  ^  28c,  10  bbls.  apples  @  $2. 

Sold  Reed  &  Young  on  account  i  5  bbls.  apples  @  $2,  15  baskets  peaches  @  40c,  20 
baskets  grapes  ^:  28c. 

Paid  cash  for  sundry  produce  $7.^0. 

Bought  three  notes  of  O.  Sherman  at  a  discount ;  one  at  30  days  for  ;^i  50  signed  by  A.  R, 
Kurtz,  one  at  60  days  for  J5200  signed  by  M.  I.  Black,  one  at  2  months  for  ;$2  50  signed  by  C. 
L.  Lewis,  each  note  being  in  favor  of  O.  Sherman,  dated  Sept.  lOth  last,  payable  at  our  bank, 
and  bearing  interest  from  date  at  the  rate  of  6  per  cent.  Sherman  has  endorsed  these  notes  to 
us,  and  we  have  given  him  a  check  for  ;$590  to  pay  for  same  after  discount. 


40  ESSENTIALS  OF  BOOKKEEPING. 

Sold  E.  C.  Martin  on  account  25  bbls.  apples  @  $2,  10  baskets  peaches  @  40c. 

Received  Invoice  from  Archer  &  Parton  of  groceries  amounting  to  ^95.20,  billed  on  ac- 
count, with  an  offer  of  2  per  cent  cash  discount  if  paid  within  20  days. 

Paid  cash  for  freight  on  last  invoice  ^2.75. 

Accepted  Norton  &  Quinn's  draft  on  us  at  5  days'  sight  for  the  amount  of  their  invoice 
credited  7th  inst.,  the  draft  being  in  their  favor. 

Sold  Smith  &  Lee  on  account  15  bbls.  apples  @  $2.  Received  cash  h'om  them  to  apply 
on  account  $2^. 

Received  for  cash  sales  to-day  ^92.27. 

Deposited  cash  in  bank  ;^i  10. 

11 

Harvey  Patterson  has  drawn  out  cash  per  check  ^27.50. 

Sent  C.  Crisman  our  two  notes  written  in  his  favor  to  apply  on  his  account,  one  at  i  5  days 
for  ^125,  and  one  at  30  days  for  ^150,  without  interest. 

Received  from  Norton  &  Quinn  on  account  75  baskets  peaches  @  30c,  60  baskets  grapes 
@  20c. 

Paid  cash  for  express  on  peaches  and  grapes  $^.^0. 

Sold  Reed  &  Young  on  account  15  baskets  peaches  @  40c,  to  baskets  grapes  @  28c,  5 
bbls.  apples  @  $2.      Received  cash  from  them  to  apply  on  account  $2^. 

Accepted  Norton  &  Quinn's  draft  on  us  at  5  days*  sight  for  the  amount  of  their  invoice 
credited  8th  inst,  the  draft  being  in  their  favor. 

Sold  Myron  Jones  on  account  i  ft).  Y.  H.  tea  @  65c,  5  ft)s.  S.  G.  starch  @  13c,  10  ft)s,  A 
sugar  @  6c,  i  carpet  broom  @  35c. 

Received  cash  from  Henry  Carter  to  apply  on  account  ;^20. 

Sold  Charles  Marvin  on  account  20  bbls.  apples  @  $2,  10  baskets  peaches  @  40c.  Re- 
ceived his  note  at  20  days,  dated  loth  inst.,  in  our  favor  and  payable  at  our  bank,  without  in- 
terest for  ;^50  to  apply  on  account. 

Sold  Smith  &  Lee  on  account  25  bu.  potatoes  @  40c. 

Sent  our  note  at  10  days  for  ;^i  68.50  to  Archer  &  Parton  to  apply  on  account. 

Sold  Charles  Trenton  on  account  i  bu.  apples  (a)  ;^i,  i  ft).  Japan  tea  @  70c,  4  doz.  eggs 
@  I  5c. 

Received  invoice  from  Meade  &  Morton  of  groceries  bought  on  account  amounting  to 
^176.75  ;  subject  to  a  cash  discount  of  3  per  cent  if  paid  within  30  days. 

Gave  check  to  the  Commercial  Railway  for  freight  on  last  invoice  1^6.25. 

Received  cash  from  O.  Sherman  to  apply  on  account  $15;  and  sold  him  on  account  12  bbls. 
apples  at  $2. 

The  student  has  taken  out  groceries  on  his  private  account  amounting  to  ;^6.75. 

Received  for  cash  sales  to-day,  including  paid  orders  in  the  order  book,  ;^76.2  5. 

Paid  cash  for  clerk  hire  ;^  17. 50. 

Deposited  cash  in  bank  ;^I00. 

12 

Sent  C.  Crisman  our  check  for  ;^40  to  apply  on  account. 

O.  Sherman  has  recently  had  large  losses  in  business,  and  we  have  settled  with  him  at  a 
discount,  receiving  ;^i  1.05  in  cash  and  discounting  the  balance.  [Credit  Sherman  with  both 
cash  and  discount  in  the  day  book,  and  carry  cash  also  to  the  cash  book.  Post  and  balance 
Sherman's  account  in  the  ledger.] 

The  student  has  drawn  out  cash  per  check  ^^20. 

Sold  Charles  Marvin  5  bu.  apples  at  $2,  10  bu.  potatoes  at  40c;  receiving  cash  $10,  bal- 
ance on  account.  [Enter  apples  and  potatoes  to  his  debit  in  the  day  book,  enter  cash  only  in 
cash  book,  and  post  both  to  Marvin's  account  in  the  ledger.] 

Accepted  Norton  &  Quinn's  draft  on  us  at  5  days'  sight  for  the  amount  of  their  invoice 
credited  loth  inst.,  the  draft  being  in  their  favor. 

Sold  E.  C.  Martin  on  account  lO  bbls.  apples  at  $2,  15  bu.  potatoes  @  40c;  and  received 
of  him  cash  ^^25  to  apply  on  account. 


SINGLE  ENTRY  FOR  PARTNERSHIP  ACCOUNTS.  41 

Seat  our  check  for  ;^73.73  to  Meade  &  Morton  to  pay  their  invoice  credited  8th  inst., 
after  deducting  the  cash  discount  they  offered. 

Received  cash  of  Smith  &  Lee  to  apply  on  account  $\^. 

Sold  Myron  Jones  on  account  i  bu.  potatoes  (u^  50c,  3  baskets  peaches  (?/)  60c,  i  sack  flour 
@^i.65. 

Received  invoice  from  Archer  &  Parton  of  groceries  bought  on  account  amounting  to 
;^  I  20.25,  subject  to  a  cash  discount  of  5  per  cent  if  paid  within  10  days. 

Paid  cash  for  freight  on  last  invoice  ;^4.75. 

Bought  of  O.  Sherman  on  account  10  doz.  eggs  @  I2^c,  90  ft)s.  butter  ((/,  140. 

Thomas  Gage  of  Albany  has  drawn  on  our  firm  at  20  days  after  date,  the  draft  being  dated 
the  lOth  inst.,  for  ;^40  due  him  from  Harvey  Patterson.  The  firm  has  accepted  the  draft  today 
and  charged  the  same  to  Patterson's  private  account. 

Received  cash  from  M.  Jones  to  apply  on  account  $df. 

Received  for  cash  sales  today  ^$67.7  5. 

Deposited  cash  in  bank  ^125. 

13 

Received  cash  from  A.  R.  Kurtz,  ^150  in  payment  of  his  note  and  83c  for  interest  on  same 
to  date. 

Sold  Reed  &  Young  on  account  10  bbls.  apples  @  $2.  Received  cash  from  them  to  apply 
on  account  ^30. 

Paid  cash  for  clerk  hire  to  date  $2J.J^. 

Sold  H.  Emery  on  account  10  Jbs.  G  sugar  @  7c,  2  cans  peaches  (ci},  25c,  2  Vos.  bread 
cakes  @  13c. 

Gave  a  check  for  ^i  24.56  to  C.  Crisman  to  prepay  our  note  of  ^125  in  his  favor,  after  re- 
ceiving a  discount  equal  to  8  per  cent  interest  on  the  note  for  the  time  it  had  yet  to  run  before 
maturity. 

Received  for  cash  sales  today  ;^52.37. 

Deposited  cash  in  bank  ;^200. 

The  cash  on  hand  amounts  to  ^29.03,  and  the  balance  in  bank  amounts  to  ^625.61. 

The  inventory  of  merchandise  unsold  amounts  to  ^^2537. 76.  The  horse  and  wagon  are 
worth  ^245.  The  rent  unexpired  for  which  we  have  paid  amounts  to  ^25.  Interest  to  date  on 
the  notes  of  M.  I.  Black  and  C.  L.  Lewis  amounts  to  1^2.48. 

All  ledger  accounts  can  now  be  balanced  except  those  of  the  partners.  A  statement  should  be 
made  showing  the  present  worth  and  net  gain  of  the  firm.  Each  partner's  share  of  the  gain  should 
be  credited  to  his  account.  The  partner's  accounts  should  be  balanced,  and  the  balances  of  all  the 
accounts  should  be  brought  down  after  closing,  ready  for  a  continuation  of  the  business  if  it  may 
be  required. 

PRACTICE  IN  PARTNERSHIP  STATEMENTS. 

I. 

Jones  and  Mason  commenced  business  as  partners  with  the  following:  Jones  invested 
cash  ^1,000;  other  property  ;^2,ooo.  Mason  invested  cash  ;^500,  store  room  ^3,000;  and  dur- 
ing the  year  the  firm  paid  a  liability  of  ^$500  for  him,  which  by  agreement  was  to  reduce  his  in- 
vested capital.     At  the  end  of  the  year  their  books  show  the  following  condition  of  business: 

Ledg-cr. — H.  Morton  Dr.  ^625,  Cr.  ^^325;  J.  Jones  Dr.  ^1  50,  Cn  ;^450;  G.  Lee  Dr.  ^525; 
M.  Stanley  Dr.  ^300,  Cr.  ;^750;  C.  Hubert  Dr.  ^850.  Cr.  ^250. 

Cash  Book. — Cash  received  ^i  5,750,  paid  out  ;^  12,250. 

Note  Book. — Notes  receivable  received  ;^2,500,  disposed  of  ;$  1,850;  notes  payable  issued 
;^2,700;  redeemed  ;^  1,700;  value  of  store  room  ^3,100. 

The  partners  decide  to  increase  their  capital  invested  by  the  amount  of  iheir  net  gain. 
What  is  each  partner's  net  investment  at  closing? 

n. 

Smith  &  Perkins,  enter  into  co-partnership,  Smith  investing  ;^3,ooo,  and  Perkins  investing 
^4,OOD.  Each  partner  is  to  share  in  the  gain  or  loss  in  proportion  to  his  capital  invested.  At  the 
end  of  the  year  their  books  and  inventory  show  the  following  results:  ' 

[continued  on  page  43.] 


42 


ESSENTIALS  OF  BOOKKEEPING. 


'...^2i.,:/e^f---z^r-(:^^  C/c^.  /J,  /P-^- 


r=>LJ^,<X-<:^.-e■^^-■ 

.--^y^.    (p^^-^-^-z-e^Uty 

s 

3S 

/^^Zy^^}^-i^^iy(/c^^z^£.^Ly 

/  ^ 

2f 

-^^A-^a^.    KZ/yLe-'^'u-^^^rr-p-^^ 

/  s- 

if 

(^.^.  ^V^^^a^^i--^^.-^^^ 

^/ 

/s- 

(^ce.<:^^  cYc^'ot^^'-'^^ 

^f 

s^F- 

j^y^.^.^.^.U^i^'^  U2e^ 

/  o 

V 

''■^-A1<5Z.<^      /^^-Z^CPi^L-ly'-T.-t.-T^ 

/  ¥ 

y 

Ji::^^L^.''k-zM,<i^L^Ciyl.^k---i^ 

/  0 

/ 

-ypcc^f-A^ 

■■■^£7<*-<^^  07^<><^<2'-»'j-<:-i2-^ 

^9 

OS 

O^^-^J'Z-i*^^  C/f^=e--<^::z-^>-i-r /'-^ 

(>zs 

(>/ 

9i,^-^^ 

kJ^o-c^C'^  /^i^-?ile.<ty  C'p^e<:;e-c-t-^'-!SZ-<^-<^^ 

S^  0 

'J/.'>i^i'(-e^T't^c^-i-Y 

IS  3/ 

1¥S 

ZS 

7^ 

2 

4/^ 

¥  Z/  f 

^r 

/  3 

8-5 

c:>J-l^-^i^-^^L^.^^y- 

ajA.^....^.^ 

/yZe^^z.<;6eJ¥-  .^2^c^Vi£^^^ 

/  7^ 

/^ 

^:^^^.cA.^^'^6^^^Uir^^ 

Z/  S 

4^i- 

LA.   /'^^oiAz^c^-^-t-iTt:!-^ 

/ 

os 

/'^ST5'-'i-«J<r?''t-^'^c;:»,:^i<>t'Z--^'t-'»--t.-^ 

J^ 

so 

-^.-^^^^-.....^ 

^0 

yZ-tH^-^y 

C>f.z 

2S 

/  /  (f3 

^J- 

30  26, 

03 

Kj^^'?--Z-'Ty<-^.-<iyCi''t''L,C^y'l-yy" 

J^^^tU.-ts6<:.^i,i...tk^  yZ^-^H^«^;^t-o^^^!t-t^ 

/  ¥ 2y 

SO 

/  3^^ 

(,S 

Z  8  Zl 

/s 

/  ¥zy 

^0 

2  6?  3 

^8- 

JSy.^.^itc.^.^c:^^..^.'^^  /'Ze^^-QPci.^^^-z^^^^ii^i^ 

/  ^  / 

.f^ 

/  SZf 

¥¥ 

'/  3f^ 

(.S 

/  0  / 

f¥ 

/  ¥fC> 

^? 

~r 

3VZC> 

03 

SINGLE  ENTRY  FOR  PARTNERSHIP  A  CCOUNTS.  43 

Ledg'er, — Personal  accounts  due  the  firm  ^5,000,  of  which  ;^i,ooo  is  worth  only  50  cents 
on  every  dollar.     Personal  accounts  due  from  the  firm  ^3,000. 

Casli  Book. — Cash  on  hand  ;^500. 

Bank  Book. — Balance  of  cash  in  bank,  1^3,500. 

Note  Book. — Notes  Receivable  unpaid  ^2,500,  Notes  Payable  unpaid  ;^3,ooo. 

Inventory. — Merchandise  unsold,  $2,750,  store  room  ^3,500. 

During  the  year  Smith  has  drawn  out  on  his  private  account  ^200,  and  Perkins  has  like- 
wise drawn  out  ;^iOO. 

Required  the  present  worth  of  the  firm  and  of  each  partner,  after  allowing  the  balance  of 
gain  not  drawn  out  by  each  partner  to  increase  his  capital  stock. 

III. 

H.  Sherwood  and  M.  Parks  enter  into  partnership  as  real  estate  and  insurance  agents. 
Sherwood  makes  no  investment.  Parks  invests  the  ofifice  equipments  and  good  will  of  a  busi- 
ness already  established  and  estimated  worth  ^i  150. 

Each  partner  devotes  his  whole  time  to  the  business,  and  Sherwood  is  to  receive  one-third 
of  the  profits  and  Parks  two-thirds. 

At  the  end  of  one  year  they  have  cash  in  bank  ;^668.iO,  their  office  outfit  and  the  good 
will  of  the  business  are  now  worth  ;^I575.     James  Parton  owes  the  firm  on  account  ^i  12.50. 

The  firm  owes  Caleb  Martin  on  account  ;^75,  Cyrus  Clement  on  account  ;^57.50,  Myron 
Newman  on  account  ^27.50,  and  the  College  Insurance  Co.  on  account  ^95.60. 

During  the  year  Sherwood  has  drawn  out  ^$650,  and  Parks  has  drawn  out  ^950.  What 
is  each  partner's  present  worth  after  the  gains  have  been  credited? 


QUESTIONS  FOR  REVIEIW. 

I.  What  opening  entry  should  be  made  in  a  partnership  business?  2.  How  should  part- 
ner's investments  be  recorded  ?  3.  What  record  should  be  made  of  balances  of  accounts  in- 
vested ?  4.  If  a  cash  transaction  is  part  of  a  day  book  entry,  how  should  it  be  entered  in  the 
cash  book  to  avoid  repetition  in  the  ledger?  5.  How  may  cash  and  bank  accounts  be  kept 
separately  in  the  cash  book?  6.  What  record  should  be  made  in  the  cash  book,  to  show  an 
excess  or  a  shortage  of  cash  on  hand  ?  7.  What  record  is  made  of  a  discount,  if  it  is  allowed  on 
a  cash  payment  to  apply  on  account  ?  8.  How  may  discount  offers  from  wholesale  merchants 
be  shown  in  the  ledger?  9.  How  is  the  maturity  of  a  note  found?  10.  What  is  the  effect 
of  accepting  a  draft.  1 1.  What  date  on  an  accepted  draft  is  used  in  estimating  its  maturity  ? 
12.  Where  should  notes  and  acceptances  be  recorded,  when  given  to  apply  on  account  ?  13. 
What  record  is  made  in  the  books  of  the  gain  or  loss  of  each  partner  ? 


44  ESSENTIALS  OF  BOOKKEEPING. 


DEBITS  AND  CREDITS. 


Every  transaction  in  business  will  make  equal  debits  and  credits,  if  all  accounts  are  kept 
that  are  affected  by  the  transaction.  There  may  be  one  or  more  debit  amounts,  and  likewise 
one  or  more  credit  amounts,  but  in  every  case  the  total  of  the  debits  will  equal  the  total  of  the 
credits. 

GENERAL  RULE.  FOR  DEBIT  AND  CREDIT. 

Debit  the  account  that  costs  or  receives  value;  credit  the  account  that  produces  or 
gives  value. 

In  every  possible  transaction  we  will  find  some  person  receiving,  or  some  department  of 
our  business  costing  value;  and  some  person  giving,  or  some  department  of  our  business  pro- 
ducing value. 

Thus,  if  I  buy  merchandise  of  a  firm  on  account,  the  merchandise  costs  value,  and  the  firm 
gives  value.  If  I  sell  merchandise  to  a  firm  on  account,  the  firm  receives  value,  and  the  mer- 
chandise produces  value. 

If  I  pay  cash  for  merchandise,  the  merchandise  costs  value,  and  cash,  representing  the 
cash  drawer  or  safe,  gives  value.  If  I  sell  merchandise  for  cash,  the  cash  receives  value,  and 
the  merchandise  produces  value. 

If  I  receive  cash  from  a  firm  on  account,  cash,  representing  the  cash  drawer,  receives  value, 
and  the  firm  gives  value.  If  I  pay  a  firm  cash  on  account,  the  firm  receives  value,  and  cash, 
representing  the  cash  drawer,  gives  value. 

Thus  we  might  analyze  every  possible  transaction,  showing  that  there  is  one  account  re- 
ceiving or  costing  value,  and  another  account  giving  or  producing  value. 

There  are  transactions  that  affect  more  than  two  accounts.  If  I  sell  merchandise  to  a  firm 
and  receive  cash  for  a  part  of  the  price  and  their  verbal  promise  to  pay  the  balance  at  another 
time,  cash  receives  a  value  and  the  firm  also  receives  a  value ;  and  merchandise  produces  the 
two  values. 

If  I  buy  merchandise  of  a  firm  and  pay  them  cash  for  a  part  of  the  purchase  and  owe  them 
for  the  balance,  merchandise  costs  the  entire  amount;  while  cash  gives  a  part  of  the  value  and 
the  firm  gives  the  balance. 

In  every  transaction  in  which  one  or  more  accounts  receive  or  cost  value  and  are  debited, 
and  in  which  one  or  more  accounts  give  value  and  are  credited,  it  will  be  seen  that  the  sum  of 
the  debit  values  must  equal  the  sum  of  the  credit  values. 

Double  Entry  bookkeeping  keeps  every  debit  and  credit  that  is  related  to  the  business  ; 
while  Single  Entry  bookkeeping  keeps  only  a  part  of  these  debits  and  credits,  anxi  omits  the 
others. 

It  will  appear,  therefore,  that  if  we  desire  a  complete  showing  of  all  results  connected  with 
the  business,  we  must  use  the  Double  Entry  System. 


DEBITS  AND  CREDITS.  45 

SPECIAL  RULES  FOR  DEBIT  AND  CREDIT. 

All  debits  and  credits  may  be  determined  by  applying  the  general  rule  already  given,  yet 
it  will  assist  tlie  young  accountant,  if  we  give  him  a  number  of  special  rules,  each  of  which  re- 
lates to  a  distinct  variety  of  transactions. 

1.  Persons  or  Corporations  should  be  debited  for  what  they  owe  us,  or  what  they  re- 
ceive from  us  on  account;  and  credited  for  what  we  owe  them,  or  what  we  receive  from  them  on 
account. 

Personal  accounts  include  accounts  kept  with  individuals,  companies,  banks  and  all  corporate 
institutions  that  are  legally  competent  to  make  contracts  and  transact  business.  A  personal  ac- 
count, if  not  in  balance,  shows  a  resource  or  a  liability. 

2.  Cash  account  should  be  debited  for  all  cash,  or  papers  equivalent  to  cash,  received; 
and  credited  for  all  cash,  or  papers  equivalent  to  cash,  paid  out. 

Cash  represents  money,  or  its  equivalent,  and  includes  specie,  currency,  bank  checks,  bank 
drafts,  certificates  of  deposit,  postoffice  orders,  express  orders,  and  all  drafts  and  orders  on  other 
firms  payable  at  sight  or  on  demand.  If  such  papers  as  the  last  two  named  are  entered  as  cash 
received,  they  will  be  counted  among  the  items  of  cash  on  hand,  and  if  we  find  that  they  are  not 
collectible  at  once,  we  can  afterward  enter  them  to  the  credit  of  Cash,  and  debit  Bills  Receivable 
account  for  their  amount. 

Demand  notes  and  due  bills  payable  on  demand  are  not  usually  classed  as  cash;  because 
they  are  not  practically  collectible  at  once,  although  they  are  so  written.  If  the  maker  of  a  de- 
mand note  or  due  bill  expected  to  pay  it  at  once,  he  would  pay  cash  or  write  a  check  instead  of 
giving  the  note  or  due  bill.  These  papers  are  properly  time  papers,  and  should  be  classed  as  bills 
receivable. 

The  creditor  side  of  Cash  can  never  properly  be  larger  than  the  debtor  side.  Unless  the  ac- 
count balances,  the  debtor  side  should  be  in  excess,  showing  a  resource  just  equal  to  the  amount 
on  hand  and  in  bank. 

If  we  keep  a  bank  account  separate  from  the  cash  account,  the  bank  should  be  debited  for  all 
sums  deposited;  and  credited  for  all  checks  drawn  on  the  bank. 

3.  Bills  Receivable  should  be  debited  for  all  promissory  notes  and  written  promises  of 
others,  when  received,  and  credited  for  the  same  when  disposed  of. 

Bills  Receivable  include  notes,  due  bills,  time  drafts  on  other  firms  payable  to  us,  and  any 
other  paper  that  contains  a  written  promise  to  pay  us  at  some  future  time. 

If  we  draw  a  time  draft  on  a  firm,  and  sell  the  draft,  we  cannot  credit  Bills  Receivable,  for 
the  reason  that  we  must  credit  the  firm  whose  account  has  given  us  the  value.  Hence,  we  can  make 
this  rule,  that  no  paper  can  be  credited  to  Bills  Receivable,  unless  it  has  previously  been  debited 
to  that  title. 

We  must, debit  and  credit  the  face  value,  no  matter  how  much  we  give  or  receive  for  the  paper* 
the  discrepancy,  if  any,  being  carried  to  some  other  title. 

If  Bills  Receivable  account  does  not  balance,  the  excess,  which  must  be  on  the  debtor  side, 
will  show  a  resource.  The  value  of  the  resource  will  depend  upon  the  responsibility  of  the  makers 
and  endorsers  of  the  bills  which  we  still  hold. 

4.  Bills  Payable  should  be  debited  for  the  face  value  of  our  notes  and  written  promises 
to  others,  when  we  pay  them;  and  credited  for  the  face  value  of  our  notes  and  written  promises 
to  others,  when  we  issue  them. 

When  we  pay  a  firm's  draft  on  us  at  once,  instead  of  accepting  it,  we  debit  the  firm  who  drew 
on  us  and  credit  Cash.  When  we  accept  a  draft  instead  of  paying  it  at  once,  we  debit  the  firm  who 
drew  on  us  and  credit  Bills  Payable. 

If  Bills  Payable  account  does  not  balance  the  excess,  which  must  be  on  the  creditor  side,  will 
show  a  liability;  this  amount  showing  our  written  obligations  outstanding. 

5.  The  Proprietor,  or  Partner,  should  be  debited  for  any  liabilities  assumed  by  the 
business  for  him.  and  for  any  money  or  property  taken  from  the  business  by  him;  and  credited 
for  any  money  or  property  received  by  the  business  from  him. 

Early  bookkeepers  used  the  title  Stock  to  represent  a  single  proprietor's  investment  account, 
but  modern  bookkeepers  have  discarded  the  use  of  this  title,  except  in  the  business  of  a  joint  stock 
company;  where  it  is  used  to  represent  the  aggregate  capital  of  the  corporation. 


46  ESSENTIALS  OF  BOOKKEEPING. 

6.  Merchandise,  or  some  other  property  title,  should  be  debited  for  the  cost  of  all  mov- 
able or  personal  property,  or  its  worth  when  invested;  and  credited  for  all  amounts  realized  from 
such  property. 

The  title  Merchandise  generally  includes  all  goods  and  wares  that  are  bought  and  sold  in 
trade;  although  some  merchants  desire  accounts  that  will  show  the  loss  or  gain  of  special  varieties 
of  merchandise.  In  such  cases,  special  titles  will  be  used;  as  Grain,  Pork,  Live  Stock,  Coal, 
Wood,  etc. 

Freight  and  drayage,  if  paid  entirely  for  merchandise,  or  any  other  outlay  of  money  directly 
in  purchasing  merchandise  or  in  preparing  it  for  sale,  should  be  debited  to  this  account. 

If  the  merchandise  is  all  sold,  an  excess  of  the  creditor  side  of  each  of  these  accounts  will 
show  a  profit,  while  an  excess  of  the  debtor  side  will  show  a  loss. 

If  part  of  the  merchandise  remains  unsold,  an  inventory  of  its  present  value  must  be  added  to 
the  credit  of  the  proper  account,  before  the  profit  or  loss  can  be  determined.  The  value  of  this  in- 
ventory is  also  classed  as  a  resource. 

7.  Real  Estate  should  be  debited  for  the  cost  of  all  fixed  property,  such  as,  buildings, 
town  lots  and  lands,  or  their  value  when  invested;  and  credited  for  all  amounts  realized  from 
such  property. 

Repairs,  taxes,  insurance,  etc.,  should  be  debited  to  Real  Estate  as  part  of  the  cost. 

Property  owners  sometimes  wish  to  know  the  profit  that  comes  from  special  pieces  of  property. 
In  such  case,  they  designate  the  property  by  special  titles;  as.  Elevator  A,  Elevator  B,  Store  Room 
No.  1,  Dwelling  39  Fourth  Ave.  If  the  special  title  does  not  fully  locate  the  property,  its  location 
should  be  described  in  explanation  at  the  right  of  the  ledger  title,  so  that  a  stranger  might  under- 
stand the  books  if  it  were  necessary. 

As  real  estate  is  only  a  variety  of  property  accounts,  it  requires  an  inventory,  and  shows  a 
profit,  loss,  and  resource,  in  the  same  way  that  Merchandise  does. 

8.  Stocks  should  be  debited  for  their  cost  or  for  any  assessments  we  may  have  to  pay 
while  a  stockholder;  and  credited  for  values  received  from  them,  either  in  sales  or  dividends. 

The  term  Stocks  includes  shares  in  joint  stock  companies,  and  bonds  issued  by  Government, 
State,  County,  Township,  City,  and  by  railroad  and  manufacturing  corporations. 

The  accountant  keeps  a  separate  ledger  account  with  each  variety  of  stocks  that  comes  into 
his  possession,  naming  them  after  the  corporation  to  which  they  belong;  as,  U.  P.  Stocks,  meaning 
shares  or  bonds  issued  by  the  Union  Pacinc  Railway;  B.  C.  R.  Stocks,  meaning  shares  or  bonds  is- 
sued by  the  Business  College  Railway. 

Stocks  being  a  variety  of  property  accounts,  must  be  credited  with  the  value  of  stocks  unsold, 
the  profit,  loss,  and  resource  being  found  as  in  Merchandise. 

9.  Shipment  accounts,  if  kept,  should  be  debited  for  the  cost  and  charges  of  all  merchan- 
dise sent  by  us  for  sale  on  our  account;    and  credited  for  all  amounts  received  from  such  sales. 

The  shipment  account  is  used  when  we  desire  to  keep  a  special  account  of  the  gain  or  loss  re- 
sulting from  a  shipment  of  merchandise  sent  to  a  commission  merchant  for  sale  on  our  risk. 

Many  merchants  do  not  keep  a  shipment  account,  merely  making  a  memorandum  of  the  mer- 
chandise shipped,  and  carrying  out  no  debits  or  credits,  except  for  freight  or  other  expenses  until 
the  shipment  is  sold,  when  they  credit  merchandise  account  with  the  amount  realized  from  the  sale. 
In  such  a  case,  freight  and  ether  expenses  of  the  shipment  should  be  debited  to  merchandise  ac- 
count, r    ,-        I-- 

If  we  keep  a  merchandise  account,  we  should  debit  it  for  all  expenses  of  the  shipment. 

Shipments  made  to  different  agents,  are  each  kept  under  a  different  ledger  title;  and  sometimes, 
each  distinct  shipment  to  the  same  agent  is  given  a  separate  account,  so  that  the  merchant  may  know 
the  exact  gain  or  loss  on  any  particular  venture. 

Examples  of  these  ledger  titles:  Shipment  to  Stacy  &  Wentworth,  Shipment  to  Morey  &  Lane, 
No.  1,  etc.  .  ,  . 

All  shipment  accounts  are  like  merchandise,  and  should  be  credited  with  any  values  per  in- 
ventory, these  values  being  resources;  after  which,  the  accounts  will  show  a  gain  or  loss,  unless 
the  sides  balance. 

10.  Expense  should  be  debited  for  all  outlays  in  conducting  the  business,  that  cannot  be 
debited  directly  to  other  accounts;  and  credited  for  all  values  returned  directly  from  these 
outlays. 

Expense  usually  includes  outlays  for  rent,  salaries,  books  and  stationery  for  ofiiceuse,  postage, 
fuel,  light,  office  furniture,  advertising,  traveling  expenses,  etc. 

Sometimes  the  item  paid  for  and  debited  to  Expense,  is  afterward  sold  or  disposed  of  in  such 
a  way  as  to  return  some  value  to  us;  as,  the  selling  of  second  hand  office  furniture,  or  of  postage 
stamps  and  stationery  that  have  been  bought  for  office  use  and  debited  to  Expense.  In  such  case. 
Expense  should  have  credit  for  the  amount  received. 


DEBITS  AND  CREDITS.  47 

An  inventory-  is  often  necessary  in  Expense  account,  before  the  actual  gain  or  loss  on  this 
account  can  be  determined.  A  merchant  may  prepay  his  rent  for  six  months  and  only  three  months 
of  the  time  may  have  expired  when  he  closes  the  account.  Rent  prepaid  and  unexpired  should  be 
entered  as  an  inventory  to  the  credit  of  Expense  account. 

In  like  manner,  rent  or  salaries  due,  but  unpaid,  should  be  entered  as  inventories  to  the  debit 
of  Expense.  The  inventory  named  in  the  preceding  paragraph  is  a  resource,  and  the  last  named 
inventory  is  a  liability,  and  the  excess  of  the  debit  side  of  Expense  account  shows  a  loss. 

I  I.  Interest  a)id  Discount  should  be  debited  for  all  interest  paid  or  assumed  by  us  and 
all  discount  allowed  to  others  by  us;  and  credited  for  all  interest  received  by  us  and  all  dis- 
counts allowed  by  others  to  us. 

Interest  is  the  amount  allowed  the  lender  for  the  use  of  money.  Discount  is  the  deduction 
allowed  from  any  given  amount. 

Some  accountants  separate  these  into  two  titles.  Premium  or  Exchange  is  another  title  like 
the  above,  and  it  is  used  by  some  to  represent  the  amount  in  excess  of  the  face  value  that  is  paid 
in  the  purchase  of  drafts. 

Interest  payable  due  but  unpaid  should  be  entered  as  an  inventory  to  the  debit  of  Interest  and 
DiscDuit,  aid  interest  re^sivable  da3  bat  unpaid  should  b^  entered  as  an  inventory  to  the  credit  of 
this  account,  after  which  the  account,  if  not  in  balance,  will  show  again  or  loss.  Interest  payable  in- 
ventory will  be  a  liability,  and  interest  receivable  inventory  will  be  a  resource. 

12.  Loss  and  Gain  should  be  debited  for  all  losses  that  cannot  be  debited  to  other  titles; 
and  credited  for  all  gains  that  cannot  be  credited  to  other  titles. 

All  of  the  ledger  accounts,  whose  differences  show  a  gain  or  loss  at  closing,  are  balanced,  and 
these  differences  are  carried  to  an  account  entitled  "  Loss  and  Gain  Closing,"  to  distinguish  it 
from  the  regular  loss  and  gain  account. 

In  this  closing  account,  the  losses  carried  from  other  accounts  are  entered  as  debits;  and  the 
gains  as  credits.  The  balancing  entry  of  this  account  will  show  a  net  loss  to  the  business  if  the 
debits  are  the  larger,  or  a  net  gain  if  the  credits  are  the  larger. 

Other  titles  than  those  given  may  be  used  as  they  may  be  required  in  any  particular  busi- 
ness, but  the  debits  and  credits  of  such  titles  will  conform  to  the  general  law  already  given; 
Debit  zv hat  costs;  credit  zv hat  produces  value. 


METHODS  OF  BOOKKEEPING. 

The  principles  of  debit  and  credit  are  recognized  by  all  Double  Entry  bookkeepers;  but 
their  methods  of  recording  the  entries  are  various,  each  business  developing  a  system  adapted 
to  its  S[)ecial  requirements. 

The  complete  routine  of  bookkeeping  consists  of  making  the  historical  entries,  determining 
the  debits  and  credits,  and  posting  each  debit  and  credit  under  its  appropriate  title. 

In  the  simpler  methods  of  Double  Entry  three  books  are  used,  the  Day  Book,  Journal,  and 
Ledger. 

THE.  DAY  BOOK, 

The  Day  Book  contains  a  complete  record  of  every  transaction  and  agreement,  entered  in 
consecutive  order  as  they  occur.  It  differs  from  the  Single  Entry  day  book  in  two  respects; 
namely,  it  gives  a  historical  record  of  each  transaction  without  naming  the  debits  or  credits,  and 
it  records  every  transaction,  whether  for  cash  or  other  terms. 

Every  transaction  carried  out,  and  every  agreement  relating  to  the  business,  should  be 
carefully  described;  thus  making  the  book  a  complete  and  reliable  history  of  the  business,  re- 
corded in  historical  order.  The  first  entry  should  contain  the  location  of  the  business,  the  pro- 
prietor's name,  and  an  account  of  his  investment.  The  date  should  be  given  at  the  top  of  each 
page,  and  if  the  date  changes  before  the  page  is  completed,  the  new  date  should  be  written  in 
the  center  of  the  page,  leaving  the  column  at  the  left  for  check  marks. 

The  first  set  of  money  columns  are  only  used  when  there  are  several  items  in  a  transaction, 
totals  or  single  amounts  being  carried  to  the  second  set  of  money  columns.       The   footing  of 


48  ESSENTIALS  OF  BOOKKEEPING. 


this  second  set  of  columns,  being  forwarded  to  each  new  page,  will  finally  give  the  total  amount 
of  the  business  transactions  for  the  period  represented. 

All  sales  should  be  itemized  except  retail  sales  for  cash,  so  that  a  duplicate  bill  of  the 
items  may  be  given  when  required.  All  purchases  from  other  firms  should  be  itemized,  unless 
a  bill  of  purchase,  an  invoice,  is  received.  In  the  latter  case,  the  invoice  can  be  filed  away  and 
the  entry  can  designate  "  Merchandise  per  invoice  " 

THE  JOURNAL. 

The  Journal  is  an  intermediate  book  of  entry  in  which  we  name  the  ledger  titles  that  are 
affected  by  the  transactions  recorded  in  the  day  book.  The  debit  and  credit  amounts  are  kept 
distinct  by  using  separate  columns  for  each,  and  the  titles  are  usually  kept  distinct  by  writing 
the  debit  titles  in  the  left  half  of  the  wide  column  and  the  credit  titles  in  the  right  half  of  the 
same  column. 

The  process  of  transferring  entries  from  the  day  book  to  the  journal  is  called  Journalizing. 

When  a  record  is  transferred  from  the  day  book  to  the  journal,  a  check  mark  is  made  on 
the  left  margin  of  the  day  book  entry,  so  that  the  bookkeeper  may  know  what  entries  have 
been  journalized. 

Since  the  ledger  titles  are  the  names  of  persons,  or  of  accounts  represented  as  persons,  they 
should  always  be  written  as  proper  names;  hence,  ledger  titles  written  in  the  journal  should 
begin  with  capitals. 

As  journal  paper  is  ordinarily  ruled,  the  column  to  the  left  of  the  wide  space  is  used  for 
recording  the  ledger  pages  as  postmarks,  when  the  entries  are  posted  to  the  ledger  ;  the  wide 
space  is  used  for  recording  the  ledger  titles  that  are  affected  by  the  transaction,  the  left  half  of 
the  space  being  reserved  'for  debits,  and  the  right  half  for  credits ;  the  left  of  the  two  sets  of 
money  columns  is  used  for  debit  amounts,  and  the  right  of  the  two  sets  is  used  for  credit 
amounts. 

The  date  is  kept  at  the  top  of  the  page,  and  a  change  of  date  on  any  page  is  recorded 
between  the  entries  in  the  space  for  titles,  as  in  the  day  book. 

A  journal  entry  complete  consists  of  the  date  of  the  transaction  either  expressed  or  bear- 
ing the  date  last  given,  the  debit  and  credit  titles  affected  by  the  transaction,  and  the  amount  of 
each  debit  and  credit.  This  entry  may  be  made  at  any  time  after  the  transaction,  but  it  should 
bear  the  date  of  the  original  entry. 

As  the  debit  and  cred-t  amounts  in  each  transaction  are  equal,  it  follows,  that  the  debit 
and  credit  columns  of  the  journal  must  have  equal  foot  ngs,  each  of  which  must  agree  with  the 
footings  of  the  day  book,  if  all  entries  have  been  journalized. 

THE.  LEDGER. 

The  Ledger  is  the  book  of  results,  containing  every  debit  and  credit  of  the  business,  prop- 
erly classified  and  summed  up. 

Each  title  recorded  in  the  journal  has  a  separate  page  or  part  of  a  page  in  the  ledger.  If 
the  title  is  debtor  in  the  journal,  its  amount  should  be  written  under  the  same  title  in  the  ledger, 
on  the  left  or  Dr.  side.  If  the  title  is  creditor  in  the  journal,  its  amount  should  be  written  under 
the  same  title  in  the  ledger,  on  the  right  or  Cr.  side.  The  page  of  the  journal  from  which  the 
entry  is  posted,  is  written  in  the  folio  column  of  the  ledger. 

The  explanation  column  in  the  ledger  is  not  used  by  practical  bookkeepers,  except  in  sys- 
tems of  bookkeeping  in  which  the  ledger  is  posted  from  two  or  more  books,  in  which  case  the 
name  of  the  book  from  which  the  entry  is  posted,  will  appear  in  the  explanation  column.  If  it 
is  desired  to  keep  a  record  of  the  term  of  payment  of  a  sale  or  purchase,  the  same  can  be 
entered  in  the  explanation  column,  as  illustrated  in  account  of  H.  P.  Smith  on  page  54. 

The  ledger  may  be  posted  at  any  time,  but  each  entry  should  bear  the  date  of  the  original 
transaction,  as  shown  in  day  book  and  journal. 

To  avoid  the  tendency  to  reverse  debits  and  credits,  it  would  be  well  for  the  student  to  follow 
the  custom  of  many  practical  accountants;  namely,  posting  all  debit  entries  in  the  journal  on  the 
dates  to  be  posted,  before  posting  any  of  the  credit  entries,  as  the  repeated  change  from  debit  to 
credit,  or  the  reverse,  makes  an  occasional  reversed  entry  possible  and  highly  probable. 


EXERCISES  IN  DOUBLE  ENTRY.  49 

.Since  the  journal  contains  equal  debits  and  credits,  and  since  the  debits  in  the  journal  are 
posted  as  debits  in  the  ledger,  and  the  credits  in  the  journal  are  posted  as  credits  in  the  ledger, 
it  follows,  that  all  the  debits  in  the  ledger  will  make  a  sum  equal  to  all  the  credits  in  the  ledger. 
When  this  is  found  to  be  true,  the  ledger  is  said  to  be  in  balance.  If  the  total  of  all  the  debits 
in  the  ledger  is  not  equal  to  the  total  of  all  the  credits,  the  ledger  is  said  to  be  out  of  balance. 
The  ledger  is  proven  to  be  in  balance  by  means  of  the  proof  sheet. 

THE  PROOF  SHEET. 

The  Proof  Sheet,  often  called  a  Trial  Balance,  is  a  list  of  the  ledger  titles  with  the  totals  of 
the  debits  and  credits  of  each.  The  debits  and  credits  on  the  proof  sheet  are  arranged  in 
columns,  so  that  the  total  debits  and  credits  may  be  obtained. 

Before  taking  a  proof  sheet,  it  is  customary  to  add  up  the  debits  and  credits  of  each  ledger 
account,  and  place  the  footings  in  small  pencil  figures  under  each  column.  These  proof  foot- 
ings may  be  kept  in  the  ledger  permanently,  by  recording  them  in  small  red  ink  figures,  which 
will  not  interfere  with  other  entries  in  the  columns. 

If  the  totals  of  the  debits  and  credits  of  each  ledger  account  are  carried  to  the  proof  sheet, 
the  total  of  the  debit  column  of  the  proof  will  equal  the  total  of  the  credit  column,  and  each  will 
be  the  same  as  the  journal  and  day  book  footings.  In  business  it  is  customary  to  close 
accounts  that  are  in  balance,  and  leave  such  accounts  out  of  the  proof  sheet.  In  such  case  the 
proof  sheet  would  be  in  balance,  but  the  totals  of  the  proof  sheet  would  not  equal  the  totals  of 
the  journal  and  day  book. 

Frequently,  the  ledger  is  tested  by  taking  a  list  of  the  balances  or  excesses  of  each  account. 
Such  a  list  is  properly  called  a  Trial  Balance,  as  it  is  a  trial  of  the  balances  of  the  ledger 
accounts,  and.  if  the  ledger  is  correct,  the  total  of  the  debit  balances  will  equal  the  total  of  the 
credit  balances. 

EXERCISERS  FOR  PRACTICE. 

The  following  exercises  are  provided  to  give  the  student  practice  in  day  book  entries, 
journalizing,  posting  to  the  ledger  and  taking  proof  sheets.  The  process  of  closing  the  ledger 
will  be  illustrated  later  in  the  text,  as  it  is  not  the  author's  desire  to  confuse  the  student  by  in- 
troducing too  many  new  subjects  at  one  time. 

E,XE,RCISE  ONE,. 

DIRECTIONS. 

The  student  will  record  the  following  transactions  in  the  day  book,  giving  the  total  of  the 
amount  column.  After  journalizing  all  of  the  transactions,  the  amounts  of  the  debit  and  credit 
columns  should  each  agree  with  the  amount  of  the  daybook  column.  Afte-r  posting  all  journal 
entries  to  the  ledger,  the  proof  sheet  should  show  the  ledger  in  balance,  and  the  debit  and  credit 
footings  of  the  proof  sheet  should  each  be  equal  to  the  journal  and  day  book  footings. 

The  student  will  have  ledger  accounts,  requiring  space  as  follows  :  Cash  13  lines,  Student 
6  lines.  Merchandise  16  lines,  H.  P.  Smith  6  lines,  J.  Mason  6  lines.  Expense  9  lines,  H.  Jud- 
son  6  lines,  and  B.  Spencely  6  lines.  The  spaces  just  named  will  allow  for  the  closing  entries 
that  will  be  required  later. 

Following  B.  Spencely's  account  at  least  a  half  page  of  space  in  the  ledger  should  be  re- 
served for  the  closing  titles,  before  entering  the  accounts  belonging  to  Exercise  Two. 

After  taking  a  proof  sheet,  the  student  will  leave  the  ledger  accounts  open,  until  he  has 
studied  the  process  of  closing  the  ledger,  which  will  be  given  after  three  exercises  have  been 
posted  to  the  ledger. 

In  the  following  transactions  reference  will  be  made  to  the  rules  for  journalizing  given 
on  preceding  pages.  Model  entries  in  the  day  book,  journal  and  ledger  will  be  found  on  pages 
51  to  55. 


ESSENTIALS  OF  BOOKKEEPING. 


The  check  marks  are  not  made  in  the  left  column  of  the  day  book  when  the  day  book 
entries  are  first  written,  but  are  made  when  the  entries  are  journalized. 

The  figures  in  the  folio  column  of  the  journal  are  not  made  until  the  journal  entries  have 
been  posted  to  the  ledger. 

The  first  page  of  the  ledger  represents  the  method  of  ruling  that  we  would  advise  the 
student  to  employ,  when  he  has  several  titles  on  a  page  of  the  ledger. 

Merchandise  account  on  page  53  illustrates  the  method  of  forwarding  an  account  to  an- 
other page,  and  Merchandise  Forward,  on  page  54,  illustrates  such  an  account  forwarded. 

TRANSACTIONS. 

NOVBMBBR  1,  189 

The  student  began  business  this  day  with  cash  ;^8oo,     [Rules  2  and  5.] 

Bought  merchandise  of  H.  P.  Smith,  Chicago,  on  account,  receiving  an  invoice  for  the 
same  amounting  to  $2'j<^.^o.     [Rules  6  and  i.] 

When  an  invoice  accompanies  a  purchase  on  account,  it  is  not  necessary  to  give  a  list  of  the 
items  in  the  day  book. 

Paid  cash  for  freight  and  drayage  on  merchandise  $9.75.     [Rules  6  and  2.] 

Bought  merchandise  of  J,  Mason  on  account,  receiving  an  invoice  of  the  same  amounting 
to  ^30.     [Rules  6  and  i .] 

Paid  cash  for  store  rent  one  month  ;^I5.     [Rules  10  and  2.] 

Sold  H.  Judson  on  account  10  lbs.  Rio  coffee  @2ic,  25  lbs.  A  sugar  (jut,  5c,  i  lb.  black 
tea  @  50c,  2  gallons  syrup  ^;  55c.     [Rules  i  and  6.] 

Sales  on  account  should  be  itemized  in  the  day  book  entry. 

Received  cash  for  sundry  sales  of  merchandise  ^^7.50.     [Rules  2  and  6.] 

2 

Sold  B.  Spencely  on  account  5  lbs.  S.  G.  Starch  @  8c,  10  lbs.  Rio  coffee   ^   21c,   80  lbs. 

C  sugar  du]  4}4c.     [Rules  i  and  6.] 

Bought  of  B.  Spencely  on  account  24  lbs.  butter  @,  20c.     [Rules  6  and  i .] 

Purchases  on  account  should  be  itemized  in  the  day  book,  unless  an  invoice  accompanies  the 
purchase. 

Received  cash  for  sundry  sales  ^12.75.     [Rules  2  and  6.] 

Paid  cash  for  advertising  ^3.75.     [Rules  10  and  2.] 

3 

The  student  has  drawn  out  cash  $2^.     [Rules  5  and  2.] 
Received  cash  for  sales  this  day  ;$28.55.     [Rules  2  and  6.] 

5 

Sent  H.  P.  Smith  cash  per  draft  to  apply  on  account  ^150.     [Rules  i  and  2.] 
Paid  cash  for  exchange  on  above  draft  25c.     [Rules  10  and  2.] 
Received  cash  for  sundry  sales  1^25.50.     [Rules  2  and  6.] 

6 

Sold  B.  Spencely  on  account  10  lbs.  Rice  @  8c,  2  lbs.  Japan  tea  (o;  75c,  30  lbs.  A  sugar 
@  5c,  3  sacks  flour  @  ;^r.20.     [Rules  i  and  6.] 

Paid  cash  for  cleaning  store  room  $3.     [Rules  10  and  2] 
Received  cash  for  sundry  sale's  ^19.85.     [Rules  2  and  6.] 

7 

Paid  J.  Mason  cash  on  account  ^25.     [Rules  i  and  2.] 

Sold  H.  Judson  on  account  5  lbs.  prunes  @  12c,  2  lbs.  cheese  @  i6c,  25  lbs.  G  Sugar  @ 
5)^c,  I  sack  flour  ;^i.20.     [Rules  i  and  6.] 

Received  cash  for  sundry  sales  $22.75.     [K.ules  2  and  6.] 


EXERCISES  IN  DOUBLE  ENTRY. 


51 


,      ^Zc^T^^   /,     /i^f - 


/ 


\/ 


y/ 


0^.  ^/v><2^;e£^-.,.:^;^.Zc:;..^ 


K  C>^..-t,£^!^£>,st.;«<^Cx.-^;Z^-^,-S/i^^  /    /-^^-Z^-e?. 


l/^ 


/ 


./" 


«/ 


>^ 


-2      ^,<5^et-t>'.  jS'y^v.^yt^C't^lA^  ■  SS 


^ 


;2. 


■^.  jZU 


.  Z/ 


^^ 


-'_^-^^er-»--  <z-<^,.<i-'pTuy ^-d.-e!c.c^-e~<±y 


Cxit-<,et>'  c-is?,<f^^^^-Cji^^-7^ 


y^.'*i-^J2/.^Cl<<^*^yi^^^i^Pt.d^  cC4.<st^^^  C-est<i-*^^ 


^^d? 


zyfscf 

JO 


¥ 


7 


¥ 


/  Z 


J/s- 

7  rf'^~vJ~ 


^s 


jTO 


/O 


<f^ 


T' 


52 


ESSENTIALS  OF  BOOKKEEPING. 


""^.^t^^-^-^-^-^^,      /t^^-z^  /.    /  S-f- 


z 
/ 

I 
/ 

/ 
/ 

1 
/• 

/ 

1 

/ 
/ 

z 


"(/Paz-^d^^A-^ 


'!^e^y^.^ 


7pZ^i^,^,c^ 


/yz^€^t^^L^. 


^^^.tfZ^k-^X' 


^<;^^^4-e->'^-<i^f^ 


L^ 


A, 


x^J.-£^, 


■^d.^^ 


^^t^c^^u^-t-t-ite^ 


..^6^'dL^i^ 


C^,  y^'Z.tPi^i^tT-,^^^ 


'V^^<i,Jl^ 


/yz,<:^U..€^ 


-Z 


9n^:L-^. 


t^i' 


9h^. 


\Lcy 


^.^  J, 


.,^^-Z!t«-<=<^i^»'Z'^ 


^  (;o 


^7f 


jff 


S  00 


,V/ 


:"^' 


f 


JO 


/.-r 


rs 


77' 


JO 


/  s 


¥  ^S 


y  sa 


C>  /O 


"/  ?S 


/ 


so^ 


/o 


^ 


80 


¥ 


^O 


./  Z 


3 


7 


'S 


7 


s 


7- 


'S 


jy. 


JT 


/>>'>-t-'€>-t-<-->l- -> 


2S 


^/  'y^ 


Z^ 


/  /  ^9  /P 


EXERCISES  IN  DOUBLE  ENTRY 


53 


/Sf-\ 


2, 
3 
J- 


X 


Z^t^t^L^e.-'i-T^-'^f' 


■P^ 


T 


JisT 


^l 


-^y^z<:£jLy 


i  O  O 
7 

// 

1  2- 


7^ 


■f-? 


^7  9 

7 

3  o 


3  7.  (^  o  .}- 


ro 


r<f' 


(   o 


7t^ 


/Sf- 

[<nr       / 

2- 

\S 
& 

(o 

7 


rf^ 


h^ 


%- 


r 


/ 
/ 

/ 
/ 

2. 
X 


e-o 


/  6' 


3 


r.6" 


54 


ESSENTIALS  OF  BOOKKEEPING. 


...^ 


9r. 


,  jr-r-tn'^-'-'  -jfi  ^'-^* 


31*^ 


ojr 


/rf- 

/IrtT' 


^^rv~J^.  J^T-MXl^A-at- 


2- 

2. 


7  V" 
3  s-o 


/,r<j 


/ 


Jl  xt^i/T     3  O    t^< 


T" 


^ 


;i  ya^ro 


7f 


/ 

J- 


IS 


/tf- 

hrU- 


(/^^^^^<2>;^Le.->'Z-«^-^-->^ 


/ 
2. 


/4 
J 


7s- 
2S- 


3o 


EXERCISES  IN  DOUBLE  ENTRY. 


55 


9S' 


"T 


/>;- 

/rf- 

ll<r^ 

7 

f  o 

yiu^ 

7- 

t 

^  r^ 


/ 


d^ 


^,^-;t:&-4.'OC-<i-e^ 


^. 


(,-<2t^^-e=e:;^e->-i--^ 


V_y<?-^^  -2^^, 


C<i    Ui'y-t-i.'i-Tr.-'Zy^ 


zs 
f  /  ^ 

3  2  V 

2^ 
'2.  Z 

8- 

/  3 


d~o 


/  ^S-  ¥ 


OS 


Vs 


fc 


2  J  / 
/J? 

SO 


¥: 


7^ 


SO 


/  "/S- 


ro 


^  fi 


56 


ESSENTIALS  OF  BOOKKEEPING. 


EXERCISE,  TWO. 


DIRECTIONS. 

The  following  transactions  should  be  entered  in  the  day  book,  journal  and  ledger,  and 
after  taking  a  proof  sheet  of  the  ledger,  the  accounts  should  be  left  open  until  the  order  of 
closing  the  ledger  has  been  studied,  after  which  the  accounts  should  be  closed. 

•  Sometimes  a  business  transaction  will  have  one  debit  and  several  credits  or   several  debits 
and  one  credit,  or  several  each  of  debits  and  credits. 

Transaction  number  twelve  below  requires  one  debit  and  three  credits  arranged  in  the 
journal  as  follows : 

{Compound  Journal  Entry  for  Transaction  Tzuelve.) 


/hduy. 


Su^Xy 


.>t:i^^/-e^^yiybn^..^<!^iy€i^o^2yr 


/  /  0  o 


/  o  o 


It  will  be  observed  that  the  sum  of  the  three  credits  in  above  entry  is  equal  to  the  one 
debit. 

In  Exercise  Three  a  journal  entry  will  be  given,  having  two  debits  and  one  credit. 

The  ledger  for  Exercise  Two  should  begin  on  page  4  of  the  blank  book,  ajlowing  the  first 
3  pages  for  ledger  accounts  and  closing  entries  of  Exercise  One.  The  ledger  accounts  of 
Exercise  Two  "will  require  the  following  space,  which  will  allow  for  the  closing  entries  :  Cash 
13  lines,  J.  Sherman  5  lines.  Merchandise  10  lines,  T.  Trenton  7  lines,  Quick  &  Sharp  7  lines, 
Henry  Grant  4  lines.  Shipment  to  Denver  6  lines. 

The  transactions  are  given  by  number,  and  the  numbers  may  be  entered  in  place  of  dates. 

We  have  introduced  two  shipments  of  merchandise  in  the  transactions,  to  illustrate  the 
two  methods  of  recording  shipments.  In  transaction  6  we  make  a  shipment  to  Quick  &  Sharp, 
our  regular  firm,  to  whom  we  make  frequent  shipments.  We  do  not  care  for  a  special  account 
showing  the  gain  on  each  shipment  made  to  this  firm,  merely  considering  the  wheat  shipped  to 
them  as  our  merchandise  until  it  is  reported  sold. 

The  shipment  of  butter  and  cheese  in  transaction  13,  requires  a  special  ledger  title,  as  we 
desire  to  know  the  result  of  this  shipment. 

Reference  will  not  be  made  to  the  rules  for  journalizing  in  the  following  transactions,  ex- 
cept when  new  titles  are  introduced. 

The  student  should  post  this  ledger  on  loose  paper  and  close  the  accounts  after  studying  the 
rules  for  closing  ledger  on  pages  62  and  63.  When  he  has  learned  to  close  the  ledger  properly  he 
can  copy  the  accounts  in  his  ledger  blank. 

TRANSACTIONS. 

Commenced  business  without  capital. 

1.  Borrowed  cash  of  J.  Sherman  on  account  $650. 

2.  Paid  cash  for  fifteen  loads  of  wheat,  450  bu.  (fJ)  90c. 

3.  Bought  of  T.  Trenton  on  account  75  bu.  wheat  @  91c. 

4.  Paid  cash  for  screening  wheat  ;^i.50.     [Rules  6  and  2.] 

5.  Sold  the  screenings  for  cash  ^2.25. 

6.  Shipped  520  bu.  wheat  to  Quick  &  Sharp,  commission  merchants,  to  sell  on  my  ac- 
count and  risk. 

Only  a  memorandum  of  transaction  6  is  necessary. 


EXERCISES  IN  DOUBLE  ENTRY. 


57 


7.  Paid  cash  for  freight  on  the  wheat  shipped  in  transaction  6,  ^$49. 50. 

All  outlays  made  for  this  shipment  should  be  debited  to  Merchandise,  which  should  also  be 
credited  for  the  proceeds  of  the  wheat  when  reported  sold. 

8.  Paid  T.  Trenton  cash  on  account  $2^. 

9.  Quick  &  Sharp  report  tliat  tliey  have  sold  my  wheat  and    have   given   me   credit   for 
the  proceeds,  ;^579.50. 

10.     Drew  a  sight  draft  on  Quick  &  Sharp  for  ;^2  50,  and  sold  the  draft  for  cash. 

When  we  draw  a  draft  on  a  firm,  we  should  give  the  firm  credit  for  the  amount  of  the  draft. 

I  f.      Paid  cash  to  J.  Sherman  to  apply  on  account  $2"]^. 

12.  Bought  an  invoice  of  butler  and  cheese  of  Henry  Grant,  amounting  to  ;^i  lOO;  paying 
cash  ^100,  giving  my  sight  draft  on  Quick  &  Sharp  for  ^275,  and  leaving  the  balance  to  the 
credit  of  Henry  Grant.     [Rules  6,  2  and  i.] 

13.  Shipped  the  butter  and  cheese,  invoiced  at  ^i  lOO,  to  Rogers  &  Co.,  Denver,  Col.,  to 
sell  on  my  account  and  risk.     [Rules  9  and  6.] 

Debit  Shipment  to  Denver,  credit  Merchandise. 

14.  Borrowed  cash  of  T.  Trenton  on  account  ^^loo. 

15.  Paid  cash  for  freight  on  the  shipment  to  Denver  i^  133.75.     [Rules  9  and  2  ] 

16.  Drew  on  Quick  &  Sharp  at  sight  for  ^54.50,  giving  the  draft  to  T.  Trenton  to  apply 
on  his  account. 

17.  Received  a  bank  draft  from  Rogers  &  Co.  for  ;^ [475.50,  net  proceeds  of  our  ship- 
ment made  in  Transaction  13.      [Rules  2  and  9] 

18.  Paid  cash  to  J.  Sherman  for  the  balance  of  his  account  ^375. 

19.  Paid  ca?h  to  T.  Trenton  in  full  of  his  account  ;^88.75. 

20.  Paid  cash  to  Henry  Grant  in  full  of  his  account  ;^725. 

PROOF  SHE.E.T. 

We  give  the  proof  sheet  of  Exercise  Two  in  two  forms,  the  first  giving  the  totals  of  all 
ledger  accounts  and  showing  total  debits  and  credits  equal  to  the  journal  footings,  the  second 
omitting  all  accounts  that  are  in  balance  and  showing  the  remaining  debits  and  credits  equal. 

FIRST  FORM.  SECOND   FORM.    ■ 


Cash 

J.  Sherman 

Merchandise 

T.  Trenton 

Quick  &  Sharp 

Henry  Grant 

Shipment  to  Denver 

2477 
650 

1624 
168 
579 
725 

1233 

75 

25 
25 
50 

75 

2178 
650 

1681 
168 
579 
725 

1475 

7458 

50 

75 
25 
50 

50 

Totals,  s.ame  as  Journal 

7458 

50 

50 

Cash 

Merchandise 
Shipment  to  Denver 

2477 
1624 
1233 

5335 

75 
25 
75 

75 

2178 
1681 
1475 

50 
75 
50 

5335 

75 

ILXERCISE,    THREE,. 

DIRECTIONS. 

In  the  following  exercise  the  student  will  use  as  titles  of  property  accounts,  Real  Estate 
and  B.  C.  R.  Stocks.  The  College  Bank  should  be  debited  for  all  deposits,  and  credited  for  all 
checks  drawn. 

The  transactions  should  be  recorded  in  day  book,  journal,  and  ledger,  and  a  proof  sheet 
should  be  taken  as  in  former  exercise,  leaving  the  ledger  unclosed. 


ESSENTIALS  OF  BOOKKEEPING. 


Transaction  number  twelve  below,  requires  two  debits   and   one   credit  arranged  in  the 
journal  as  follows : 

{Compound  Jour  )ial  Entry  for  TruMsactioii  Twelve^ 

t4  OOO 
/  Soo 

S'5oo 


It  will  be  observed  that  the  sum  of  the  two  debits  in  above  entry  is  equal  to  the  one  credit. 

A  page,  or  at  least  a  half  page,  of  the  ledger  should  be  reserved  for  the  closing  entries  of 
Exercise  Two,  before  opening  any  accounts  of  Exercise  Three. 

The  ledger  accounts  in  this  exercise  should  be  spaced  as  follows,  to  allow  for  the  closing 
entries  that  will  be  required  later  in  the  text:  Cash  12  lines,  J.  Martin  4  lines,  Bills  Payable 
6  lines,  College  Bank  8  lines.  Real  E'^tate  8  lines,  B.  C.  R.  Stock  8  lines,  Bills  Receivable  3 
lines. 

This  leds'er  should  also  be  posted  on  loose  paper  and  the  accounts  should  be  closed  properly 
before  any  of  the  accounts  are  written  in  the  ledger  blank. 

TRANSACTIONS. 

1.  Borrowed  cash  of  James  Martin  on  account  j^i  850. 

2.  Borrowed  cash  of  H.  C.  Sumner,  on  my  note  at  60  days  in  his  favor  $1750.  [Rules 
2  and  4.] 

3.  Deposited  cash  in  the  College  Bank  $3000. 

4.  Bought  a  store  room  and  business  lot  of  R.  E.  Gainor  for  $5000,  giving  in  payment 
my  check  on  the  College  Bank  for  ^2500,  and  my  note  at  30  days  in  his  favor  for  ^2500. 
[Rules  7,  I  and  4.] 

When  we  keep  a  bank  account,  the  bank  should  be  credited,  instead  of  Cash,  for  checks  issued. 

5.  Paid  cash  for  repairs  on  the  store  room  $155.     [Rules  7  and  2.] 

6.  Bought  10  shares  B.  C.  R.  Stock  for  ;^82  5,  giving  my  check  on  the  College  Bank  for 
^425,  and  cash  for  the  balance.     [Rules  8,   i  and  2.] 

7.  Received  cash  for  one  month's  rent  of  store  room  $37. 50.     [Rules  2  and  7.] 

8.  Paid  cash  for  taxes  on  store  room  and  lot  ;^59.75.     [Rules  7  and  2.] 

9.  Received  cash  for  a  dividend  on  my  B.  C.  R.  Stock  $35.     [Rules  2  and  8.] 

10.  Sold  2  shares  of  my  B.  C.  R.  Stock  for  cash  ;^  182.50.     [Rules  2  and  8.] 

1 1.  Deposited  cash  in  the  College  Bank  $200. 

12.  Sold  my  store  room  and  business  lot  to  C.  C.  Mayne  for;!g5  500,  receiving  cash  ;^4000 
and  his  note  at  30  days  in  my  favor  for  ;^i  500.     [Rules  2,  3,  and  7.] 

I  3.     Paid  cash  for  an  assessment  on  my  B.  C.  R.  Stock  ^40.     [Rules  8  and  2.] 

14.  Deposited  cash  in  the  College  Bank  ;^38oo. 

15.  Gave  my  check  on  the  College  Bank  to  R.  E.  Gainor  for  $2^00,  to  pay  the  note  I 
gave  him  in  Transaction  4. 

16.  Gave  my  check  on  the  College  Bank  for  ^950  to  H.  C.  Sumner,  and  my  remaining  8 
shares  of  B.  C.  R.  Stock  estimated  at  ^800,  to  pay  my  note  given  him  in  Transaction  2. 
[Rules  4,  I,  and  8.] 

17.  Gave  James  Martin  my  check  on  the  College  Bank  for  ;^350,  and  C.  C.  Mayne's  note 
for  ;^ 1 500,  received  in  Transaction  12,  to  pay  for  the  money  I  borrowed  in  Transaction  I. 
[Rules  I  and  3.] 


OPENING,  PROVING,  AND  CLOSING  BOOKS. 


59 


PROOF  SHE,E.T. 

We  give  the  proof  sheet  of  Exercise  Three  in    two   forms,  the  same  as  explained    in   Ex- 
ercise Two.     The  footings  of  first  form  will  be  the  same  as  the  journal. 

SECOND   FORM. 


FIRST  FORM. 

Cash 
J.  Martin 
Bills  Pay. 
College  Bank 
Real  Estate 
B.  C.  R.  Stock 
Bills  Rec. 

7855 
1850 
4250 
7000 
5214 
865 
1500 

75 
75 

7654 
1850 
4250 
6725 
5537 
1017 
1500 

75 

50 
50 

28534 

28534 

75 

Cash 

Colleg-e  Bank 
Real  Estate 
B.  C.  R.  Stock 

7855 

7000 

5214 

865 

75 
75 

7654 
6725 
5537 
1017 

75 

50 
50 

20934 

20934 

75 

Opening,  Proving,  and  Closing  Books. 


Expert  accountants  are  in  constant  demand  in  commercial  centers,  because  a  large  number 
of  young  accountants,  who  may  succeed  fairly  well  in  ordinary  routine  bookkeeping,  are  not 
fully  trained  in  three  important  and  essential  topics  pertaining  to  the  subject;  namely,  opening 
anew  set  of  account  books,  tracing  errors  in  posting  and  putting  ledgers  in  balance,  and  closing 
old  ledgers  for  filing  away  and  forwarding  balances  to  new  ledgers. 

In  the  present  chapter  we  shall  treat  these  three  topics  briefly,  not  with  the  expectation  of 
making  experts  of  all  who  may  study,  but  of  giving  the  thoughtful  student  such  suggestions  as 
will  prepare  him  to  open,  prove,  and  close  any  ordmary  set  of  books,  intelligently  and  correctly. 


OPENING    A    SET    OF    BOOKS. 


If  the  accountant  is  about  to  open  a  new  set  of  books,  he  should  first  make  a  statement  of 
the  resources  and  liabilities  that  are  to  be  carried  into  the  business  represented.  These 
resources  and  liabilities  include  all  inventories  of  property  and  of  claims  in  favor  of  the  pro- 
prietor or  against  him.  After  the  statement  is  completed,  each  item  among  the  resources  is 
debited  to  its  appropriate  title,  and  each  item  among  the  liabilities  is  credited  to  its  apppropriate 
title,  the  excess  of  the  debits  over  the  credits  being  credited  to  the  proprietor's  account,  showing 
his  net  capital,  or  the  excess  of  the  credits  over  the  debits  being  debited  to  tiie  proprietor's 
account,  showing  his  net  insolvency.  These  debits  and  credits  having  been  entered  in  the 
journal,  the  entries  can  be  posted  to  the  ledger,  and  the  books  are  open,  ready  for  the  record  of 
new  transactions. 

The  process  of  changing  from  single  to  double  entry  is  identical  with  the  above.  Double 
entry  merely  adds  to  the  single  entry  ledger  accounts,  using  ledger  titles  to  represent  notes 
receivable,  notes  payable,  cash,  and  the  necessary  property  and  incidental  accounts,  and  the  pro- 
prietor's account  with  the  business. 

The  nature  of  the  business  and  the  information  desired  relative  to  it,  must  guide  the 
accountant  in  choosing  ledger  titles  to  represent  the  various  property  and  incidental  accounts. 

Thus,  one  merchant  may  debit  all  outlays  for  freight  and  drayage  to  Merchandise,  and 
another,  who  wants  to  know  the  amount  of  his  freight  annually,  may  debit  them  to  Freight. 

One  merchant  may  keep  an  account  with  Fuel  and  Lights,  and  an  account  with  Salaries  ; 
while  another  merchant  would  class  them  all  as  Expense. 


6o  ESSENTIALS  OF  BOOKKEEPING. 

Thus  we  might  enumerate  an  almost  endless  variety  of  ways  in  which  these  representative 
accounts  are  kept;  but  this  general  principle  holds  good,  that  a  debit  to  any  of  this  class  of 
accounts  shows  an  outlay,  and  the  excess  of  any  of  these  debits  shows  a  loss;  while  a  credit 
to  any  of  these,  shows  that  amount  received,  and  an  excess  of  credits  shows  a  gain. 


PROVING    THE,    LE^DGELF.. 

In  mercantile  bookkeeping  the  ledger  should  be  proven  in  balance  a  least  once  a  month. 
In  bank  bookkeeping  a  proof  of  the  ledger  is  taken  daily.  This  proof  consists  of  the  footings 
of  each  ledger  account,  or  a  proof  of  the  differences  between  the  sides  of  each  ledger  account. 
The  latter  form  is  properly  named  a  trial  balance,  because  it  is  a  trial  of  the  balances  of  the 
several  accounts.  The  student  can  readily  see  that  the  debit  balances  should  foot  up  the  same 
as  the  credit  balances. 

Thus,  if  a  ledger  account  stands  Dr.  ^i,000,  and  Cr.  $1,000,  it  follows  that  we  can  drop 
this  name  frohi  the  proof,  and  the  remaining  totals  will  still  be  equal.  If  an  account  stands  Dr. 
;^i,ooo,  and  Cr.  $500,  we  can  drop  the  ;^500  common  to  both  sides,  and  merely  take  into 
account  the  excess  of  ;^5oo  on  the  Dr.   side. 

In  this  way  we  can  continue  to  drop  equal  amounts  from  each  side  of  the  proof,  until  we 
have  left  only  the  balances  or  excesses,  which  must,  from  the  nature  of  the  case,  be  in  balance, 
if  our  work  is  correct. 

If  the  proof  sheet  or  trial  balance  is  not  in  balance,  we  know  at  once,  that  either  our 
ledger  is  out  of  balance,  or  else  our  additions  in  making  the  proof  are  incorrect.  Unless  we 
are  usually  reliable  in  our  additions,  it  would  be  advisable  to  go  over  them  a  second  time  and 
prove  them  correct.  [In  proving  additions,  always  add  the  columns  in  reverse  order  from  that 
of  the  first  addition.] 

If  the  additions  prove  correct,  and  the  proof  is  still  out  of  balance,  the  student  should  find 
the  difference  between  the  total  debits  and  the  total  credits  on  the  proof,  and,  if  there  is  an  entry 
equal  to  this  difference,  he  should  see  if  it  has  been  omitted;  or,  if  there  is  an  entry  equal  to  half 
this  difference,  he  should  see  if  it  has  not  been  entered  on  the  wrong  side  of  an  account;  or,  if  the 
difference  is  divisible  by  9,  he  should  look  especially  for  some  number  reversed  in  posting;  as,  92 
for  29,  or  37  for  73,  etc.  It  is  a  law  of  numbers,  that  any  set  of  figures  reversed  will  make  an  error 
divisible  by  9;  as  92  for  29  makes  an  error  of  63,  which  is  7  times  9;  75  for  57  makes  an  error  o'f  18, 
w^hich  is  twice  9. 

If  the  mistake  is  merely  1  in  any  column;  as  1  cent,  10  cents,  $1,  $10,  $100,  $1,000,  and  there  is 
no  such  error  from  incorrect  posting,  the  student  should  add  his  ledger  columns  again,  watching 
especially  the  number  he  carries  to  the  incorrect  column. 

If  he  does  not  find  the  error  by  any  of  these  processes,  his  only  sure  way  is  to  compare  journal 
and  ledger,  entry  by  entry,  checking  all  amounts  in  the  ledger  that  are  correctly  posted,  and 
observing  carefully,  that  there  are  debit  entries  in  the  ledger  that  correspond  in  amount  to  the 
credit  entries  of  each  transaction.  After  checking  the  ledger,  the  student  should  look  oyer  its 
columns  carefully,  and  cross  out  all  entries  that  are  not  checked,  after  which  a  correct  addition  of 
the  ledger  entries  should  bring  the  proper  results. 

A  correct  proof  or  trial  balance  is  not  an  absolute  test  of  the  accuracy  of  ledger  accounts, 
as  the  original  entries  may  be  carried  out  incorrectly,  for  which  there  is  no  remedy  in  book- 
keeping. This  is  merely  a  matter  of  incorrect  arithmetic,  and  no  person  who  is  inaccurate  in 
ordinary  calculations,  should  be  trusted  to  carry  out  the  original  entries  in  the  books. 

Occasionally  the  bookkeeper  may  skip  an  entire  journal  entry  in  posting,  and  leave  the 
ledger  in  balance  because  both  debit  and  credit  have  been  omitted. 

Again,  in  posting  any  debit  or  credit,  we  may  enter  it  upon  the  proper  side  of  the  ledger, 
but  in  the  wrong  account.  Thus,  we  may  debit  or  credit  Smith  for  entries  that  belong  to  Jones's 
account.  This  error  would  not  affect  our  proof,  because  the  entry  would  be  on  the  proper  side 
of  the  ledger.  Such  a  mistake  can  only  be  found  by  checking  the  entire  ledger  as  we  sug- 
gested above. 

Another  test  of  the  accuracy  of  personal  accounts  is  employed  by  wholesale  merchants 
and  others  who  have  accounts  with  a  large  number  of  persons.  A  monthly  statement  is  made 
out  and  sent  to  each  firm  on  the  first  of  each  month.  If  the  statement  is  incorrect,  the  firm 
receiving  it  is  expected  to  report  the  error,  and  by  means  of  these  reports  the  errors  that  occur 
in  personal  accounts  are  usually  discovered. 


OPENING,  PROVING,  AND  CLOSING  BOOKS.  6i 

Bills  Receivable  and  Payable  can  usually  be  proven  and  corrected  by  the  notes  on  hand  or 
outstanding,  and  cash  and  bank  accounts  can  be  corrected  by  the  balances  of  cash  on  hand  and 
in  bank. 

If  above  accounts  are  fully  tested  and  the  necessary  corrections  made,  it  will  be  an  easy 
matter  to  trace  any  errors  that  may  occur  in  the  other  accounts. 

We  have  dwelt  to  some  extent  upon  this  topic  of  proving-  the  ledger,  that  we  may  once  more 
emphasize  the  necessity  of  precision  on  the  part  of  the  student  by  showing-  him  that  although 
double  entry  affords  many  excellent  checks  upon  carelessness,  it  cannot  afford  a  means  of  correct- 
ing- or  even  discovering  every  error.  Hence,  it  is,  that  few  business  men  will  tolerate  more  than 
one  error  made  by  their  bookkeeper.  He  must  cultivate  absolute  accuracy,  if  he  would  be  sure  of 
his  position  for  any  length  of  time. 


CORRECTING  E,RP^ORS. 

We  treat  the  above  topic  in  this  connection  ;  because  the  student  will  want  to  know  how 
to  correct  a  mistake  properly,  after  he  may  have  discovered  it. 

ORIGINAL  E.NTRIES. 

If  an  error  is  found  in  an  original  entry,  the  incorrect  entry  should  not  be  erased  or  altered, 
as  that  would  destroy  its  validity  as  evidence  in  case  of  a  dispute.  When  an  original  entry 
requires  correction,  if  in  a  day  book,  journal,  or  sales  book,  the  entry  can  be  marked  on  the 
margin,  "Void,  corrected  below,  or  on  page — ,"  naming  the  page  where  the  correct  entry  may 
be  found.  The  corrected  entry  should  refer  back  to  the  previous  entry  marked  void,  so  that 
anyone  examining  the  books,  would  be  able  to  understand  the  changes  made  and  the  reasons 
for  making  them.  If  the  original  entry  requiring  correction  is  in  the  cash  book,  and  it  is  neces- 
sary to  keep  the  transactions  for  the  day  togetlier,  it  would  be  better  to  draw  a  light  red  line 
through  the  entry  including  the  amount,  and  interline  the  correct  entry  above.  If  an  entry  has 
been  entirely  omitted,  it  can  be  recorded  as  soon  as  discovered,  and  the  proper  date  given  with 
explanation,  "Omitted." 

TRANSFE.R  E.NTRIE,S. 

Erasures  and  changes  are  allowable  in  all  cases  except  original  entries,  but  they  should  be 
resorted  to  very  seldom;  because,  they  are  likely  to  mar  the  appearance  of  the  books.  A 
method  followed  by  German  accountants  is  to  change  all  figures  in  the  amounts  of  incorrect 
entries  to  ciphers,  which  has  the  effect  to  void  the  entry,  after  which  the  new  entry  can  be 
made  with  proper  explanations.  If  one  is  careful  in  using  this  method,  he  will  not  mar  the 
appearance  ol  his  books  by  such  changes. 

Errors  in  bookkeeping  generally  arise  from  lack  of  attention  to  the  work  before  us,  and 
from  the  mistaken  notion  that  all  entries  must  be  made  in  a  hurry.  Where  so  much  value  is 
involved  as  is  usually  represented  in  a  set  of  account  books,  it  behooves  the  accountant  to  give 
his  entire  attention  to  the  Work  before  him,  and  to  proceed  deliberately  and  thoughtfully  in 
recording  the  history  of  transactions,  and  in  making  transfers  from  one  book  to  another. 


CLOSING  THE  LEDGER. 

In  practical  bookkeeping  the  ledger  is  usually  closed  once  a  year,  or  when  a  change  is  to 
occur  in  the  business,  or  when  an  old  ledger  is  filled  and  a  new  one  is  to  be  opened.  The 
closing  of  the  ledger  marks  an  era  in  the  business  and  shows  the  proprietor's  present  financial 
condition.  Accounts  with  persons  should  be  ruled  up  and  closed  as  often  as  settlements  are 
made,  even  if  the  accounts  are  not  paid  in  full.  This  closing  shows  an  agreement  between  the 
persons  relative  to  the  items  debited  and  credited  up  to  the  date  of  the  closing.  If  there  is  an 
excess  of  either  side,  it  is  brought  down  after  the  account  is  closed,  and  forms  the  beginning  of 
a  new  account. 


62  ESSENTIALS  OF  BOOKKEEPING. 

PREPARATORY  TO  CLOSING.  • 

Before  closing  the  ledger,  an  inventory  should  be  taken,  estimating  the  present  value  of 
real  estate,  merchandise,  and  other  property  belonging  to  the  business,  all  items  of  expense  pre- 
paid, all  accrued  interest,  and  all  claims  in  our  favor  or  against  us  that  are  not  shown  in  the 
ledger. 

A  statement  should  be  made  from  the  proof  sheet,  or  trial  balance,  and  inventories,  show- 
ing every  resource,  liability,  gain,  and  loss,  and  the  present  worth  and  net  gain.  The  results  of 
the  statement  should  be  proven  correct,  after  which  the  closing  entries  should  be  made  in  the 
ledger  accounts. 

An  account  with  a  person,  cash,  bank,  or  bills  receivable,  shows  a  resource,  when  its  debits 
are  greater  than  its  credits.  An  account  with  a  person,  bank,  or  bills  payable,  shows  a  liability, 
when  its  credits  are  greater  than  its  debits. 

Cash  and  bills  receivable  accounts  can  not  have  greater  credits  than  debits,  and  bills  payable 
account  cannot  have  greater  debits  than  credits. 

All  inventories  of  property  on  hand,  expense  prepaid,  and  interest  receivable  are  resources; 
and  all  inventories  of  claims  due  from  us  and  interest  payable  are  liabilities. 

All  ledger  accounts,  except  those  with  persons,  cash,  bank,  bills  receivable,  and  bills  pay- 
able, will  show  losses,  if  their  debits  exceed  their  credits,  and  gains  if  their  credits  exceed  their 
debits. 

Inventories  showing  resources  must  be  added  to  the  credits  of  their  proper  titles  and  in- 
ventories showing  liabilities  must  be  added  to  the  debits  of  their  proper  titles,  before  finding  the 
losses  or  gains  on  such  accounts. 

The  statement  in  Double  Entry  bookkeeping  is  proven  correct  by  comparing  its  results. 
If  a  capital  was  invested  in  the  business,  the  net  capital  increased  by  the  net  gain  or  diminished 
by  the  net  loss,  will  equal  the  net  worth.  If  no  capital  was  invested  in  the  business,  the  net 
gain  will  equal  the  net  worth;  or  the  net  loss  will  equal  the  excess  of  the  liabilities  over  the  re- 
sources. 

ORDER  OF  CLOSING  THE  LE.DGER. 

For  convenience  in  referring  to  the  ledger  accounts,  we  will  group  them  in  two  classes  : 
Accounts  with  persons,  cash,  bank,  bills  receivable,  bills  payable,  and  the  proprietor,  or  part- 
ners, will  be  designated  as  Class  One  accounts  ;  and  all  other  titles  in  the  ledger  as  Class  Two 
accounts. 

Inventories  of  property  and  expenses  prepaid  should  be  credited  to  the  proper  titles.  Other 
inventories,  if  any,  should  be  debited  or  credited  to  the  proper  titles.  Such  entries  should  be 
written  in  red  ink,  having  the  date  of  closing  and  the  explanatory  word  "Inventory." 

All  accounts  except  the  proprietor's  or  the  partners'  should  be  closed,  writing  in  red  ink  on 
the  smaller  side,  (the  side  having  the  lesser  amount),  the  closing  date  and  the  difference  be- 
tween the  debits  and  credits,  using  as  an  explanatory  term  the  word  "Balance,"  if  a  Class  Orie 
account,  and  the  phrase  "Loss  and  Gain,"  if  a  Class  Two  account. 

The  statement  made  before  closing  the  ledger  will  give  the  correct  closing  entry  for  each  ac- 
count. Closing  entries  should  not  be  made  in  the  ledger,  until  they  have  been  proven  correct  in 
the  statement.  Resources  and  liabilities  in  the  statement  will  correspond  to  inventories  and  bal- 
ances in  the  ledger,  and  losses  and  gains  in  the  statement  will  correspond  to  loss  and  gain  entries 
in  the  ledger. 

An  account  should  next  be  opened  in  the  ledger  with  "Loss  and  Gain."  If  such  an  ac- 
count is  already  on  the  books,  the  new  title  should  be  "Loss  and  Gain  Closing."  Into  this  ac- 
count should  be  carried  all  closing  entries  in  the  ledger  representing  losses  or  gains,  losses 
being  carried  to  the  debit  side,  and  gains  to  the  credit  side. 

A  Loss  and  Gain  entry  on  the  credit  side  of  any  account  shows  an  excess  of  the  debit  side; 
hence,  a  loss.  A  Loss  and  Gain  entry  on  the  debit  side  of  any  account  shows  an  excess  of  the 
credit  side;  hence,  a  gain. 

Loss  and  Gain  account  will  now  show  a  summary  of  all  losses  and  gains  that  pertain  to 
the  business.  If  the  losses  exceed  the  gains,  the  excess  is  a  net  loss;  if  the  gains  exceed  the 
losses,  the  excess  is  a  net  gain.  If  the  result  is  a  net  loss,  it  should  be  carried  to  the  debit  of 
the  proprietor's  account,  or  of  the  partners'  accounts,  after  being  divided  according  to  contract. 


CLOSING   THE  LEDGER.  63 

If  the  result  is  a  net  giin,  it  should  be  carried  to  th';  credit  of  the  same  accounts.  The  closing^ 
entry  in  Loss  and  Gain  accounts  is  mide  in  red  ink,  writing  the  name  of  the  account  or  accounts 
to  which  the  net  gain  or  loss  is  carried.  The  closing  entry  should  be  written  on  the  smaller 
side,  in  order  that  the  two  sides  of  the  account  may  balance.  In  case  of  a  partnership,  there 
will  be  a  closing  entry  in  Loss  and  Gain  for  each  partner,  giving  the  title  of  his  account  and 
his  proportion  of  the  net  gain  or  loss. 

The  proprietor's  account  or  the  partners'  accounts  can  now  be  closed  with  a  balance  entry, 
the  balance  showing  the  net  worth  of  each. 

If  the  accounts  are  to  be  continued  in  the  same  ledger,  bring  down  the  balance  entries 
and  inventories  in  black,  writing  each  on  the  side  opposite  the  red  ink  entry.  Take  a  trial 
balance  of  these  entries  brought  down,  and  if  the  ledger  is  in  balance,  it  is  ready  for  advance 
entries. 

If  a  new  ledger  is  to  be  used,  and  the  old  one  filed  away  for  reference,  the  trial  balance 
after  closing  should  be  recorded  in  the  back  of  the  old  ledger  in  the  form  of  an  account  under 
the  title  "  Balance."  Balance  entries  and  inventories  entered  on  tlie  debit  side  of  accounts,  be- 
long to  the  opposite  or  credit  side  of  Balance  account ;  and  such  entries  on  the  credit  side  of 
accounts,  belong  to  the  opposite  or  debit  side  of  B.ilance  account.  If  the  ledger  has  been 
closed  correctly,  the  debit  balances  will  always  equal  the  credit  balances. 

Entering  these  various  balances  in  Balance  account  closes  the  history  of  the  business  as 
shown  in  the  closed  ledger,  all  Of  the  unsettled  accounts  being  grouped  together  in  Balance 
account,  from  which  they  can  be  carried  to  a  new  ledger  if  the  business  is  to  be  continued. 

When  a  series  of  ledgers  are  used,  they  may  be  designated  by  the  letters  of  the  alphabet, 
the  first  ledger  used  being  named  Ledger  A.  When  it  is  closed  and  a  second  one  opened,  the 
latter  is  called  Ledger  B,  and  the  balance  entries  forwarded  from  the  former  ledger  would  be 
entered  in  the  latter,  "  Balance,  Ledger  A." 

Some  accountants  do  not  use  Balance  account  in  closing  a  ledger  that  is  to  be  filed  away, 
but  merely  record  in  closing  the  class  one  accounts  in  the  old  ledger  "  Bal.  to  Ledger  B,"  and 
with  inventory  recording  "  Inventory  to  Ledger  B,"  and  in  the  new  ledger  they  forward  these 
balances  and  inventories,  "Bal.  from  Ledger  A,"    "Inventory  from  Ledger  A." 

Our  reason  for  advocating  the  use  of  Balance  account  in  a  ledger  that  is  to  be  laid  aside, 
is  that  this  account  may  serve  the  purpose  of  a  permanent  trial  balance  of  final  closing  entries, 
which  being  entered  on  a  page  of  the  ledger  would  ever  be  ready  for  reference  in  case  the  old 
ledger  should  be  called  into  question. 


ELxercises  in  Closing  Ihe  Ledger. 


EXERCISE,   ONE. 

In  closing  the  Ledger  in  Exercise  One,  the  following  inventories  should  be  used:  Mer- 
chandise on  hand  $2^'j.']^,  rent  prepaid  ;^io,  wages  due  clerk  $6. 

The  ledger  accounts  given  on  pages  53.  54  and  55  are  reproduced  with  the  closing  entries 
on  pages  65,  66  and  67,  and  on  page  67  will  also  be  found  the  Loss  and  Gain  account  used  in 
closing,  and  the  Balance  account,  to  which  all  balances  and  inventories  are  carried. 

On  page  64  is  given  the  statement,  which  should  be  made  before  closing  the  ledger.  This 
statement  should  be  made  on  a  loose  sheet  of  paper,  as  it  is  not  intended  for  record  in  the 
books. 

EXERCISE    TWO. 

No  inventories  are  given  in  Exercise  Two.  The  student  should  make  a  statement,  before 
closing  the  ledger,  As  he  began  business  without  capital,  his  net  worth  at  closing  will  be  the 
same  as  the  net  gain. 


64 


ESSENTIALS  OF  BOOKKEEPING. 


Loss  and  Gain  and  Balance  accounts  should  be  used  as  in  Exercise  One. 

The  student  should  open  a  ledger  account  with  himself  as  proprietor,  and  carry  the  net 
gain  from  Loss  and  Gain  account  to  his  credit.  The  student's  net  worth  at  closing  will  be 
^299.25. 

E^XERCISE,    THREE,. 

No  inventories  are  given  in  Exercise  Three.  The  student's  net  worth  at  closing  will  be 
the  same  as  his  net  gain,  as  he  began  without  capital.  A  statement  should  be  made  as  usual 
before  closing  the  ledger. 

Accounts  with  the  student  as  proprietor,  Loss  and  Gain,  and  Balance,  should  be  opened 
as  in  Exercise  Two. 

The  student's  net  worth  at  closing  will  be  ;^475.25. 


QJt 


tatement- 


(3.rercide    Lyn  t 


yy'i,.c:^!id...£^.     ^.»w-   2S7.7S  S^.      3  2L'-/.  as 
~^Z^,     zz.ao  J^^5»-<^   2.S.00 

vj!?-,^,**-  ^.Q  O   J?,-*n^. CI,.  /  0,00 


zs 


/s 


7V- 


?z 


vs 


so 


77^ 


rs 


77 


1>  s 


/  ¥0  so 


e  Zf  ss 


7 


/  r 


5¥- 


8-  2f 


ss 


55 


55 


CLOSING   THE  LEDGER. 


65 


/ST 

I 


/n- 

}l<n/. 


2. 
3 
J- 


^- 


^. 


^T 


JLJ- 


?  z  9 


S  ^f 


-5-cr 


^<r 


^  o  o 


7u^ 


2  S 


JLJ-J-o 


1  2 


f/    4 


7^ 


7^ 


^79 

■    f\ 
3  o 


fo 


C7\  a-^,.4^  a^-\^>.^    <7 


3  ^  ^ 


2^ 

J 


— ^A-T" 


^-4 


^^TAi-  ^5".5~" 


/c 


-2^ 


7^- 


J  Y^' 


.2o 


6  rv5"/\3 


f  /  (,f  o 


66 


ESSENTIALS  OF  BOOKKEEPING. 


yUnr 

Cra->  /.  fy-  B-v-u.--  -ft  «-**' 

/ 

31'f 

OS- 

Itnr- 

cT- 

^'^'^/^^T" 

/ 

/J~Jvi^ 

7 

J\S-<i^4^  C*'-''^-^  ^laJi^i-i^ 

^"^ 

s-s- 

6 

2- 

7  ^to 

2- 

/f  S 

x5- 

7 

2- 

•      J. 

~o 

v/-j-T_^vi~t.t-->^C<r-i'-V 

2- 

2-  i  ;'j— 

3  fL 

6o 

J  76  6 

O 

f^f 

■ 

^rf- 

• 

yi^nr 

.5 

■ 

X 

/so 

'hinr 

/ 

yj  -i^l^SJT      3  O     <^'>-^f4^ 

/ 

X  y'fS'o 

1 

Ufl-- it-'C-'O^'V-i.^  <r  ^ 

/  ^f 

d-a 

^n 

d-0 

xyf. 

"o 

'^f- 


>. 


\i^  ClJL'i^. u-T_-<_«,^ 


TS" 


<S" 


3  o 


/ri- 


Jo 


Jo 


Iff- 

/ 
7 

ir"<a.^-e<i^.xt-c 

-n--L-^a-a-<l-<3^ 

/ 
/ 

X 

%- 

7^ 

IS 

3  . 

'-5 

7 

/o 

— itj 

2.r 

CLOSING   THE  LEDGER. 


67 


7^f- 

/r/- 

h^ 

1 

/ 

^ 

IS' 

yuv. 

7 

(2.^^.__. 

^ 

^s- 

7 

2, 

3  ^r-o 

' 

r  '/vi" 

r  A^- 

/Sf^ 

/r/- 

ll^r^ 

1^ 

/ 

4 

'  0 

?/<rxr- 

7- 

/ 

f    ^'5 

L, 

» 

z 

7 

c/.^ 

7 

^v2lei..-C<5i-->--<_^  ».  ^ 

? 

70 

/o?' 

r"^ 

fj 

1 
^0 

' 

£^c^<:2-^^?>7-t^ 


^. 


/^^_ 


7 


^^^^^tc'C'tsCc-'i-'l'K 


J-^ 


v^ 


d~vj5 


^.?J" 


7 


7^ 


7^ 


3-J- 


5-^ 


7 

^,;l^A^ 

/ 

^^5 

/s 

7h^ 

7 

j27j!7uc-<:'tU^>-^ 

/ 

S  Zf 

65 

/ 

2  5/ 

7^ 

.A^JL^^o;^ 

z 

/  2y 

^^ 

0)^x>/i-^^'y^!-.d-'^-^ 

2 

/  0 

J7,    7h..cz.<Un^Ty 

z 

5 

..<^/(Lc.ua-^ 

2- 

8 

^5 

(7?^<3i'^t-i-->''-<^-^^ 

z 

(. 

(yj^j2K/t.t.--t-T-.^^-e^^ 

3 

? 

yo 

^yo 

OS 

97' 

OS 

68  ESSENTIALS  OF  BOOKKEEPING. 


EXERCISE,    FOUR. 

DIRECTIONS. 

In  recording  the  following  transactions,  the  student  will  use  his  own  name  to  represent  the 
proprietor,  recording  the  transactions  in  the  day  book,  journal,  and  ledger,  as  usual. 

As  the  business  commenced  in  Exercise  Four  is  to  be  continued  in  Exercise  Five,  we  have 
made  provision  in  spacing  the  ledger,  for  closing  each  account,  bringing  down  balances  and  in- 
ventories, and  continuing  in  Exercise  Five. 

The  ledger  accounts  should  be  opened  in  the  order  named,  and  spaced  as  follows :  Cash 
25  lines,  Real  Estate  13  lines.  Bills  Receivable  6  lines.  Student  8  lines,  Merchandise  14  lines, 
J,  V.  Farwell  8  lines,  T.  Jones  8  lines.  Expense  12  lines,  Interest  and  Discount  6  lines,  Hills 
Payable  6  lines,  R.  E.  Saner  4  lines. 

TRANSACTIONS. 

1.  Began  business  with  the  following  investment :  Cash  $200,  a  store  room  and  business 
lot  worth  ;^28oo,  and  a  note  in  my  favor  signed  by  N.  Mason  for  $^Q>o.    [Rules  2,  3,  7,  and  5  ] 

2.  Bought  of  J.  V.  Farwell  on  account  an  invoice  of  merchandise  amounting  to;^896.50. 

3.  T.  Jones  has  completed  shelves  and  counters  in   my   store   room,  for   which   he    has 
charged  me  ;^450  on  account.     [Rules  7  and  1.] 

4.  Paid  cash  for  freight  on  the  merchandise  ;^  18.75. 

5.  Paid  cash  for  cleaning  store  room  $3.50.     [Rules  10  and  2.] 

6.  Paid  cash  for  advertising  the  business  $22.75.     [Rules  10  and  2.] 

7.  Received  casli  for  sales  of  merchandise  $27.50. 

8.  Paid  T.  Jones  cash  on  account  $50. 

9.  Borrowed  cash  at  bank,  giving  my  note  at  30  days  for  $500  and  receiving  cash  for 
the  proceeds  $496.33,  the  bnlance  being  retained  for  discount.     [Rules  2,11,  and  4.] 

10.  Paid  cash  for  a  bank  draft  for  $300,  and  sent  same  to  J,  V.  Farwell  to  apply  on 
account. 

1 1.  Paid  cash  for  exchange  on  above  draft  50  cts. 

12.  Received  cash  for  sales  of  merchandise  $37.75. 

13.  Paid  cash  for  painting  my  store  room  $52.50.     [Rules  7  and  2.] 

14.  Paid  cash  for  clerk  hire  in  store  $7.50. 

15.  Received  cash  of  N.  Mason  to  apply  on  his  note,  invested  in  Transaction  i,$250. 
[Rules  2  and  3.] 

16.  Paid  cash  for  office  books  $8.50.     [Rules  10  and  2] 

17.  Paid  cash  for  insuring  my  stock  of  merchandise  $17.50.      [Rules  10  and  2] 

18.  Sold  R.  E.  Saner  on  account  45  yds.  Newport  denims  @  i  5c,  42  yds.  Keystone  flan- 
nel @  40c,  40  yds.  Empress  cashmere  @  90c,  42)^  yds.  Long  Branch  alpaca  @  37^c,  126 
yds.  American  prints  (w,  5c,  85  yds.  Union  bleached  sheeting  @  8c. 

19.  Paid  Howard  Smith  cash  $1  50  and  sold  him  merchandise  amounting  to  $25,  to  pay 
for  labor  and  material  in  finishing  a  hall  in  the  second  story  of  my  store  building. 

20.  Received  cash  for  sales  of  merchandise  $148.36. 

The  student  may  post  and  prove  the  ledger  as  usual,  alter  which  he  will  close  the  ledger, 
using  th-'  following  inventories:  Real  estate  $3600,  merchandise  $671.25,  insurance  prepaid 
$16,  office  books  not  used  $7. 

The  business  is  to  be  continued  in  Exercise  Five,  and  the  student  will  bring  down  the  bal- 
ance or  inventory  in  each  account,  ready  for  the  next  exercise.  Loss  &  Gain  account  will  be 
closed  as  usual  into  the  student's  account. 

The  balances  and  inventories  should  be  brought  down  in  the  ledger,  with  the  opening  date 
of  Exercise  Five. 


EXERCISES  IN  DOUBLE  ENTRY 


69 


We  give  below  the  proof  sheet  of  the  ledger  before  closing,  and  the  trial  balance  of  the 
ledger  after  the  accounts  have  been  closed  and  the  balances  and  inventories  have  been  brought 
down. 


PROOF  SHEET  BEFORE 

CLOSING. 

Cash 

1159  94 

63150 

Real  Estate 

3477150 

Bills  Rec. 

500 

250 

Student 

3500 

Merchandise 

915,25 

327  20 

J.  V.  Farwell 

300 

896  50 

T.  Jones 

50 

450! 

Expense 

60 

25 

Int.  and  Discount 

3 

67 

Bills  Pay. 

500 

R.  E.  Saner 

88j59 

6555  20 

— 

6555 

20 

TRIAL  BALANCE  AFTER  CLOSING. 


Cash 

528 

44 

Real  Estate 

3600 

Bills  Rec. 

250 

Student 

3664 

78 

Merchandise 

671 

25 

J.  V.  Farwell 

596 

50 

T.  Jones 

400 

Expense 

23 

Bills  Pay. 

500 

R.  E.  Saner 

88 

59 
28^ 

5161 

5161 

28 

HXERCISE    FIVE,. 


DIRECTIONS. 


The  following  transactions  are  a  continuation  of  the  business  commenced  in  Exercise  Four. 
The  transactions  should  be  recorded  in  the  day  book,  journal,  and  ledger. 

Before  posting  to  the  ledger,  the  student  should  see  that  the  balances  and  inventories 
brought  down  in  the  several  accounts  correspond  to  the  amounts  given  in  the  last  trial  balance. 
Only  one  new  ledger  title  will  be  introduced,  J.  C.  Smith,  requiring  3   lines. 

The  Loss  and  Gain  account  closing  the  preceding  exercise,  should  have  for  its  title  "Loss 
and  Gain — Exercise  Four."  The  Loss  and  Gain  account  closing  the  following  transactions, 
should  be  a  separate  account,  under  the  title  "Loss  and  Gain — Exercise  Five." 

TRANSACTIONS. 


Continued  the  business  from  Exercise  Four. 

1.  Drew  out  cash  for  personal  use  ^24.75       [Rules  5  and  2.] 

2.  Sold  J.  C.  Smith  on  account  85  yards  Union  prints  @  5^c,  40  yds.  Hampton  brown 
sheeting  @  7c,  124  yds.  Houston  cotton  flannel  @  i2}^c,  41  yds.  cotton  drills  @  15c,  5  doz. 
Clark's  spool  cotton  @  40c. 

3.  Gave  T.  Jones  my  note  at  30  days  for  ;^200  to  apply  on  account.     [Rules  i  and  4.] 

4.  Received  cash  for  merchandise  sales  ;^92.50. 

5.  Bought  of  J.  V.  Farwell  on  account  an  invoice  of  merchandise  amounting   to  ^327.25. 

6.  Paid  cash  for  taxes  on  my  real  estate  ;^2  2.50. 

7.  Paid  cash  for  freight  on  merchandise  ^8.75.     [Rules  6. and  2  ] 

8.  J.  V.  Farwell  has  drawn  on  me  at  10  days'  sight  for  ^596.50,  to  apply  on  account,  and 
I  have  accepted  the  draft.     [Rules  i  and  4.] 

When  we  accept  a  draft  on  us,  payable  at  some  future  time,  we  should  debit  the  person  that 
draws  on  us  and  credit  Bills  Payable,  the  same  as  we  would  do  if  we  had  given  a  note  to  apply  on 
account. 

9.  Received  cash  from  N.Mason  to  p'ay  the  balance  of  his  note  ;^2  50  and  interest  on 
same  $2.     [Rules  2,  5,  and  1 1.] 


70  ESSENTIALS  OF  BOOKKEEPING. 

10.  Paid  cash  to  redeem  my  note  given  to  the  bank  in  the  preceding  exercise,  ;^500. 
[Rules  4  and  2.] 

1 1.  Received  cash  for  rent  of  hall  above  my  store  room  ^17.50. 

12.  Sold  my  entire  stock  of  merchandise  to  T.  Jones  for  ;^975,  receiving  cash  $\df'j.'j% 
and  charging  the  balance  to  his  account.     [Rules  2,  i,  and  6.] 

13.  Heceived  cash  from  T.  Jones  ;^35,  to  pay  for  rent  of  store  room.     [Rules  2  and  7.] 

14.  Paid  cash  for  my  note  given  in  Transaction  3,  ;^200  and  ^1.75  for  interest  on  the 
same. 

15.  Received  cash  of  T.  Jones  for  unexpired  insurance  on  merchandise,  which  I  have 
assigned  to  him,  $\2. 

16.  Drew  on  T.  Jones  at  10  days'  sight  for  ;^327.25,  and  sent  the  draft  to  J.  V.  Farwell 
to  apply  on  my  account. 

When  we  draw  a  draft  on  a  person,  we  should  give  that  person  credit;  and  the  person  to 
whom  we  give  the  draft  should  be  debited. 

17.  Drew  on  R.  E.  Saner  at  30  days  for  ;^88.59,  and  on  J.  C.  Smith  at  30  days  for 
;^3i.i3.  and  sold  the  drafts  at  bank  for  cash  ^[15,  the  balance  being  deducted  as  discount. 

18.  Sold  my  ofifice  books  to  T.  Jones  for  cash  $^. 

19.  Paid  cash  ^596.50  for  my  accepted  draft,  given  in  Transaction  8. 

20.  Paid  cash  for  my  personal  expenses  ^26.33. 

21.  Sold  my  lot  and  store  building  to  C.  I.  Lane  for  cash  ;^36oo. 

After  posting  and  proving  the  ledger,  the  student  may  close  the  ledger  without  inventories, 
and  carry  all  balances  into  Balance  account. 

The  student's  net  worth  after  closing  Loss  and  Gain  into  his  account  will  be  ;$37 24.61. 

EXEF^CISE,  SIX. 

DIRE.CTIONS. 

In  the  following  transactions  the  student  enters  into  partnership  with  C.  C.  Smith,  each 
making  the  same  investment  and  sharing  equally  in  the  gain  or  loss.  The  firm  engages  in  the 
business  of  note  brokers. 

A  note  broker  is  one  who  buys  and  sells  notes  given  by  other  firms.  If  a  note  is  bought 
at  less  than  its  face  value,  Bills  Receivable  should  be  debited  for  the  face  value  of  the  note,  and 
Interest  and  Discount  should  be  credited  for  the  amount  paid  less  than  the  face  value.  If  a 
note  is  disposed  of  for  less  than  its  face.  Bills  Receivable  should  be  credited  for  the  face,  and 
Interest  and  Discount  should  be  debited  for  the  amount  received  less  than  the  face. 

Some  bookkeepers  have  an  account  with  Interest,  keeping  a  separate  account  with  Discount. 
In  such  case,  the  transactions  referred  to  in  the  last  paragraph  would  be  entered  to  the  debit  and 
credit  of  Discount. 

In  recording  the  transactions  the  student  will  use  the  day  book,  journal,  and  ledger,  as 
usual.  Ledger  accounts  will  be  opened  in  the  order  named,  and  will  require  the  following 
spaces:  Cash  19  lines.  Student  6  lines.  Real  Estate  6  lines,  C.  C.  Smith  6  lines.  Bills  Receiv- 
able II  lines,  Interest  and  Discount  13  lines.  Expense  8  lines,  Commercial  Bank  Stock  8  lines, 
Loss  and  Gain  6  lines. 

After  taking  a  proof  sheet,  the  ledger  should  be  closed,  no  inventories  and  balance  entries 
being  required.  The  Loss  and  Gain  account  used  in  closing,  should  be  called  "Loss  and  Gain 
Closing,"  to  distinguish  it  from  the  Loss  and  Gain  account  posted  from  the  journal. 

TRANSACTIONS. 

1.  The  student  invested  cash  in  the  business  ^3500. 

2.  C.  C.  Smith  invested  in  the  business  a  house  and  lot  worth  ;^3000,  and  cash  ;^50O. 

3.  Bought  a  note  for  ;^6oo,  signed  by  C.  A.  Mason,  for  which  we  paid  cash  ;^58o.  [Rules 
3,  II,  and  2.] 


EXERCISES  IN  DOUBLE  ENTRY.  71 

4.  Bought  of  Henry  Sullivan  his  draft  at  30  days  on  C.  A.  Curtiss  for  ;^575.50,  paying 
cash  for  the  same  1^560. 

5.  Received  cash  for  rent  of  the  house  invested  by  Smith  ;^20. 

6.  C.  A.  Mason  has  paid  us  cash  ^15  for  interest  on  his   note,  which    we  purchased  in 
Transaction  3.     [Rules  2  and  11.] 

7.  Paid  cash  for  advertising  the  business  ;$  12.50. 

8.  Bought    twelve  sale  notes  of  R.  E.  Sherman,  the  face  of  the  notes  amounting  to 
1^778.50,  paying  cash  for  them  ^^600. 

9.  The  student  has  drawn  out  cash  $4S- 

10.  Sold  our  house  and  lot  to  A.  R.  Grant  for  ;^325o,  receiving  cash  ^1250  and  his  note 
for  ;^2000.     [Rules  2,  3,  and  7.] 

1 1.  Paid  cash  for  ten  shares  Com  nsrcial  Rink  stock  ;^i 000. [Rules  8  and  2.] 

12.  Cash  amounting  to  ^525  was  stolen  from  the  office  safe  last  night.    [Rules  12  and  2.] 

13.  Paid  cash  for  office  rent  1^27.50. 

14.  Collected  cash  ;^2  50  for  four  of  the  notes  bought  in  Transaction  8,  and  ;^  13.2 5   for 
interest  on  same.     [Rules  2,  3,  and  11.] 

15.  Bought  a  note  signed  by  T.  Mason,  dated  one  year  ago,  paying  cash  ;^I200  for  the 
face  of  the  note  and  $72  for  accrued  interest.     [Rules  3,  1 1,  and  2.] 

16.  Paid  cash  for  ofifice  books  and  stationery  $i$.7S- 

17.  The  money  lost  in  Transaction  12,  S525,  has  been  returned. 

18.  Paid  cash  :^50  for  detective  services. 

Payment  made  in  Transaction  18  could  be  debited  to  Expense;  but,  being  an  unusual  expen- 
diture, it  would  be  the  author's  advice  to  debit  Loss  and  Gain. 

19.  Paid  cash  for  postage  and  stationery  ;^7.50. 

20.  Received  cash  ;^6o  for  dividends  on  our  Commercial  Bank  stock.     [Rules  2  and  8.] 

21.  T.  Mason  has  piid  us  cash  ;^I200  for  his  note,  received  in  Transaction    15,  and  $g6 
for  interest  on  the  same.    [Rules  2,  3,  and  1 1.] 

22.  Received  cash  ^400  for  seven  of  the  notes  bought  in  Transaction  8,  and  ;^I7.50  for 
interest  on  the  same. 

23.  Received  cash  ^550  for  5  shares  of  Commercial  Bank  stock. 

24.  The  last  one  of  the  notes   bought   in   Transaction  8,  amounting  to  ^128.50  is  con- 
sidered doubtful  as  to  its  collection,  and  we  have  sold  it  for  cash-;^75. 

25.  Received  cash  of  C.  A.  Curtiss  ;^575.50,  in  payment  of  Sullivan's  draft  on  him  pur- 
chased in  Transaction  4. 

26.  Sold  our  remaining  shares  of  Commercial  Bank  stock  for  cash  ^565. 

27.  Received  cash  ofC.  A.  Mason,  ;^6oo  in  payment  of  his  note,  received  in  Transaction 
3,  and  ;^I2  interest  on  the  same. 

28.  C.  C.  Smith  has  withdrawn  from  the  business  A.  R.  Grant's  note  for  ;^2000   with   in- 
terest accrued  on  same  ;^io,  and  cash  $1782.     [Rules  5,3,  11,  and  2.] 

29.  The  student  has  drawn  out  cash  1^3747. 

30.  We  have  credited  each  partner  for  his  share  of  the  net  gain  and   have  dissolved  the 
partnership. 


72  ESSENTIALS  OF  BOOKKEEPING. 


QUE^STIONS  FOR  REVIEW. 


I.  What  is  the  general  rule  for  debit  and  credit ?  2.  In  what  does  Double  Entry 
bookkeeping  differ  from  Single  Entry?  3.  What  is  the  rule  for  debiting  and  crediting  per- 
sons? 4.  What  results  are  shown  by  a  personal  account,  if  not  in  balance?  5.  What  is 
the  rule  for  debiting  and  crediting  Cash  ?  6,  What  kinds  of  business  paper  are  considered 
as  Cash  ?  7.  Can  the  credits  of  Cash  exceed  the  debits  ?  8.  When  should  Bills  Receiv- 
able be  debited,  and  when  credited?  9.  What  business  papers  are  recorded  as  bills  receiv- 
able? 10.  What  result  is  shown  by  Bills  Receivable  account,  if  not  in  balance?  11.  When 
should  Bills  Payable  be  debited,  and  when  credited?  12.  What  result  is  shown  by  Bills 
Payable  account,  if  not  in  balance?  13.  When  should  a  proprietor  or  partner  be  debited, 
and  when  credited?  14.  When  should  Merchandise  be  debited,  and  when  credited?  15. 
What  record  is  made  of  the  unsold  merchandise?  16.  What  results  may  be  shown  by 
Merchandise  account?  17.  When  should  Real  Estate  be  debited,  and  when  credited?  18. 
What  results  may  be  shown  by  Real  Estate  account?  19.  When  should  Stocks  be  debited, 
and  when  credited?  20.  What  results  may  be  shown  by  an  account  with  Stocks?  21. 
When  should  a  shipment  account  be  kept?  22.  When  should  shipment  account  be  debited, 
and  when  credited  ?  23.  What  results  may  be  shown  by  a  shipment  account  ?  24.  When 
should  Expense  be  debited,  and  when  credited?  25.  Are  inventories  ever  recorded  in  Ex- 
pense account?  26.  What  results  may  be  shown  by  Expense  account?  2y.  When 
should  Interest  and  Discount  be  debited,  and  when  credited?  28.  Are  inventories  ever 
recorded  in  this  account?  29.  What  results  may  be  shown  by  this  account?  30.  When 
should  Loss  and  Gain  be  debited,  and  when  credited  ?  31.  May  other  titles  of  accounts  be 
used,  than  those  already  named?  32.  What  three  books  are  used  in  the  simpler  methods  of 
Double  P>ntry  ?  33.  In  what  respects  does  the  Double  Entry  day  book  differ  from  the 
Single  Entry  day  book?  34.  VVhat  is  the  office  of  the  journal?  35.  How  do  the 
footings  of  the  journal  compare  with  those  of  the  day  book?  36.  What  is  the  Double 
Entry  ledger?  37.  When  is  a  ledger  said  to  be  in  balance?  38.  What  is  a  proof  sheet, 
and  what  is  its  value?  39.  What  is  a  trial  balance?  40.  What  is  the  first  step  in  open- 
ing a  set  of  account  books?  41.  How  should  the  statement,  made  at  the  opening  of  the 
books,  be  journalized?  42.  How  can  a  set  of  Single  Entry  books  be  changed  to  Double 
Entry?  43.  What  should  govern  the  bookkeeper  in  choosing  titles  for  the  property  and  in- 
cidental accounts  ?  44.  How  often  are  ledgers  generally  proven  in  balance?  45.  What 
methods  may  be  used  for  detecting  errors  in  a  ledger  that  is  out  of  balance?  46.  Is  a  proof 
sheet  or  trial  balance  an  absolute  test  of  the  accuracy  of  the  ledger?  47.  What  additional 
test  of  personal  accounts  is  used  by  large  mercantile  houses?  48,  How  may  corrections 
be  made  in  original  entries?  49.  In  what  books  may  erasures  be  made,  in  correcting 
errors?  50.  How  often  is  the  ledger  usually  closed  in  business?  51.  What  should  be 
done  preparatory  to  closing  the  ledger?  52.  What  inventories  are  resources, and  what  ones 
are  liabilities?  53  What  accounts  belong  to  class  one?  54.  What  accounts  belong  to 
class  two  ?  55.  How  are  inventories  recorded  in  the  ledger?  56.  With  what  entry  should 
accounts  of  class  one  be  closed?  57.  With  what  entry  should  accounts  of  class  two  be 
closed?  58,  How  should  the  closing  Loss  and  Gain  account  be  closed  ?  59.  How  is  the 
proprietary  account  closed  ?  60.  When  should  Balance  account  be  used,  and  when  not? 
61.     If  several  ledgers  are  used  in  successive  years,  how  are  these  ledgers  distinguished? 


HISTORICAL  JOURNAL  AND  CASH  BOOK.  73 


SET  FOUR. 


Using-  Historical  Journal^    Cash  Book,  Bill  Book,   and  Lcdg-cr. 


EXPLANATIONS. 


The  Historical  Journal  combines  the  day  book  record  and  the  journal  entry  in  one  book. 
The  book  containing  these  combination  entries  is  sometimes  called  a  Journal — Day  Book. 

In  the  combined  records  the  journal  entries  pertaining  to  a  transaction  are  given  first  place, 
followed  immediately  by  the  descriptive  entries  necessary  to  explain  the  transaction.  In  this 
way  the  historical  journal  becomes  a  book  of  original  entry,  and,  if  properly  kept,  its  records 
are  admissible  as  evidence,  the  same  as  entries  in  a  day  book  would  be. 

The  journal  part  of  each  entry  should  be  written  in  a  larger  and  heavier  hand,  in  order  to 
be  more  readily  distinguished  by  the  bookkeeper,  when  he  posts  to  the  ledger.  The  form  on 
page  75  represents  the  historical  journal.  The  Cash  Book,  as  illustrated  on  pages  76  and  Jj, 
is  kept  in  special  columns  for  cash  and  bank.  If  a  cash  book  is  used  it  is  unnecessary  to  enter 
cash  transactions  in  the  journal,  since  cash  received  credits  the  person  or  thing  bringing  the 
cash,  and  cash  paid  debits  the  person  to  whom  or  the  thing  for  which  it  is  paid. 

In  making  a  cash  entry,  the  date  should  first  be  recorded,  followed  by  the  title  that  is 
debited  or  credited,  the  explanation,  and  the  amount.  The  method  of  recording  the  date,  and 
the  arrangement  of  the  special  columns  to  keep  the  cash  and  bank  accounts  distinct,  are  ex- 
plained on  page  33,  and  the  method  of  balancing  the  cash  and  bank  columns  is  illustrated  on 
page  34. 

If  a  cash  debit  or  credit  has  been  recorded  in  the  journal  as  part  of  a  transaction,  the  word 
"Journal"  should  be  written  in  the  title  space  in  the  cash  book,  indicating  that  the  opposite  title 
will  be  found  in  the  journal. 

The  Bill  Book,  or  note  book,  is  kept  in  this  set  in  the  same  manner  as  that  described  and 
illustrated  in  Set  Three.  Whenever  a  proof  sheet  is  taken  of  the  ledger,  the  debit  balance  of 
Bills  Receivable  account  should  correspond  to  the  amount  of  unpaid  notes  receivable  recorded 
in  the  bill  book  and  the  credit  balance  of  Bills  Payable  account  should  correspond  to  the 
amount  of  unpaid  notes  payable  recorded  in  the  bill  book. 

THE  LEDGE.R  TITLES  USED. 

The  class  one  accounts  in  any  business  would  be  kept  the  same  by  all  bookkeepers,  but 
the  same  bookkeepers  would  differ  widely  in  their  choice  of  titles  representing  the  property  and 
incidental  accounts. 

Jn  order  to  secure  uniformity  in  the  students'  books,  we  would  suggest  the  following  use 
of  the  titles  that  are  most  likely  to  be  changed  : 

Two  property  titles  may  be  used  :  Grain  account  for  wheat,  corn,  oats,  and  barley;  and 
Merchandise  account  for  wood,  coal,  salt,  and  cement. 

The  cost  of  insuring  merchandise  is  frequently  debited  to  Merchandise  account,  but  in  the 
present  set,  the  insurance  is  taken  in  one  amount  on  grain  and  merchandise,  and,  because  we 
cannot  readily  distribute  the  proportionate  cost  to  each,  the  outlay  for  insurance  should  be 
debited  to  Expense. 


74  ESSENTIALS  OF  BOOKKEEPING.  " 


An  account  should  be  kept  with  Teams,  in  which  is  debited  the  value  of  teams  invested  or 
purchased,  and  in  which  is  credited  the  amount  received  for  teams  when  they  are  disposed  of. 
The  cost  of  feed  and  care  of  horses,  and  of  repairs  on  wagons  and  harness,  should  be  debited  to 
Expense,  as  these  outlays  do  not  add  to  the  original  value  of  the  teams. 

When  a  purchase  or  sale  is  made  subject  to  draft,  it  should  be  journalized  as  on  account; 
and  when  the  draft  is  accepted  or  paid,  it  should  be  entered  as  given  to  apply  on  the  account. 

The  regular  shipments  of  grain  to  commission  firms  to  sell  for  us,  should  be  entered  in  the 
historical  journal  as  descriptive  memoranda  without  carrying  out  any  values  or  opening  any 
new  ledger  titles.  If  any  outlays  are  made  in  connection  with  these  shipments,  such  outlays 
should  be  debited  to  Gain  as  part  of  its  cost.  When  the  consignments  are  sold,  the  proceeds 
reported  should  be  credited  to  Grain. 

Each  consignment  of  merchandise  to  us,  for  sale  for  other  firms,  should  have  a  title  in  our 
ledger.  If  we  were  in  the  commission  business  and  made  a  specialty  of  such  transactions,  we 
would  have  a  separate  book  for  such  accounts.  A  consignment  account,  if  kept  in  the  ledger, 
should  have  each  debit  and  credit  itemized,  unless  the  descriptive  entries  would  require  more 
space  than  the  explanation  column  affords.  The  itemized  consignment  accounts  will  enable 
the  bookkeeper  to  estimate  the  commission  on  sales  and  draw  off  account  sales  directly  from 
the  ledger,  without  referring  back  to  the  historical  entries. 

In  order  to  secure  uniform  entries  in  the  ledger,  we  would  suggest  the  following  routine  of 
posting :  Post  all  debits  and  credits  of  a  given  dite  from  the  journal  first,  and  afterward  from 
the  cash  book,  opening  new  titles  in  the  ledger  in  the  order  required. 

The  student's  proof  sheets  on  Nov.  4  and  Nov.  6,  and  his  trial  balance  after  closing  the 
ledger  Nov.  6,  should  agree  with  the  results  given  in  the  Continued  Trial  Balance  Book  on 
page  79. 

The  account  with  Grain,  on  page  76,  illustrate  the  usual  form  of  entry,  when  an  account 
is  posted  from  more  than  one  book.     Words  and  figures  in  italics  indicate  red  ink  entries. 

The  account  with  Consignment  of  Crescent  Mills,  on  page  "j"] ,  illustrates  the  form  of 
entry,  when  it  is  desired  to  itemize  the  debits  and  credits  in  a  consignment  account. 

To  allow  for  balancing  accounts  and  bringing  down  balances,  as  required  in  the  trans- 
actions, the  ledger  accounts  should  be  spaced  as  follows:  Student  12  lines.  Teams  10  lines, 
Stacey  &  Stevens  14  lines,  Merchandise  28  lines.  Bills  Receivable  16  lines.  Real  Estate  16 
lines,  Bills  Payable  15  lines,  Union  Coal  Co.  11  lines.  Grain  25  lines,  Howard  &  Payne  12 
lines,  Consignment  of  Lee  &  Hutchins  12  lines,  H.  Martin  10  lines,  Lee  &  Lacey  10  lines. 
Consignment  of  Crescent  Mills  21  lines,  P2xpense  24  lines,  Interest  and  Discount  11  lines, 
Akron  Cement  Co.  8  lines.  Prospect  Mining  Co.  8  lines,  P.  M.  French  8  lines,  R.  Houston  5 
lines.  Commission  8  lines.  Loss  and  Gain  Closing,  Nov.  6,  i  1  lines,  H.  Miner  5  lines.  Loss  and 
Gain  5  lines,  Loss  and  Gain  Closing,  Nov.  16,  10  lines.  Balance  Account  12  lines. 

TRANSACTIONS. 

NOVBMBBR  1.  189 

The  student  began  business  to-day  with  the  following  resources  and  liabilities: 

Resources. — Cash,  ;^i,ooo;  2  teams  with  wagons  used  for  hauling  and  delivering  grain 
and  merchandise,  estimated  worth  $425  each  ;  a  balance  of  account  due  from  Stacey  &  Stevens, 
$520;  a  stock  of  coal,  wood  and  salt  inventoried  at  ;^344.50 ;  a  note  at  20  days  for  ^200,  a 
note  at  30  days  for  ;^I50,  and  a  note  at  40  days  for  ;^ioo,  each  note  being  in  favor  of  the 
student,  and  dated  Oct.  8th  ult.,  and  each  being  signed  by  Henry  Preston  ;  a  note  at  20  days 
for  1^250,  dated  Oct.  i6th  ult.,  signed  by  Ploward  &  Payne;  and  a  vacant  town  lot  fronting  40 
feet  on  Third  street,  worth  ;^20  per  front  foot.  [After  journalizing,  enter  cash  in  Cash  Book 
and  notes  in  Bill  Book.] 

Liabilities. — A  note  at  30  days  for  ;^400,  a  note  at  40  days  for  ;^500,  a  note  at  45  days 
for  $6Q)0,  each  note  being  signed  by  the  student  and  payable  to  James  Crosby,  and  each  being 
dated  Oct.  12th  ult.;  and  a  balance  of  account  in  favor  of  the  Union  Coal  Co.,  $214.50. 

Deposited  cash  in  the  Commercial  Bank  $900.     [Cash  Book  only.] 
[transactions  continued  on  page  78.] 


HISTORICAL  JOURNAL  AND  CASH  BOOK. 


75 


C^L-^^/'Z.'t^-^yL.^d^ 


^- 


/,  z^^- 


/S 


'7/ 


^^-M-^f-L 


qL 


'  'Ziy.--7-T,iA-^.-<l-Z^i^'CPC^ 


.<::?^*t^EX'i^;j:^/W^2'Z^!XZ'Z-^2^ 


2   <c-«>^,<i/,^^:iC^-£^^       z^ <^^ o    i^Sl 


<^Z^^. 


^ 


£>. 


\37 


^c-^C<i^.  ^z.-e,'!^  ^u-'C-i-y, 


--litTS*?^ 


/'?'/ 
OG 


^>^/^aA;to^         ^.^^^ 


2.  £^<?<t<t:</.€/^W^^e^.^;:£'-e^(^  ^^7^       s.-^~^ 


/  0  6  6/ 
?6  0 
5  2  0 

yo  o 
8'0  O 


/  //  y 


-577 


yof 


J  /  s 


/  7 


sv 


(,(o 


."TV 


¥2/  ^SV 


/  S  C)  C 
z  /  ^ 


7'9 


J/5 


■/ 


7 


sv 


^^ 


sv 


7^ 


ESSENTIALS  OF  BOOKKEEPING. 


"^£^1^.   /^-  "^.^a^^-^C/^^^-^-tf*^  64^^?.^-^^^  c/SJ^. 


/Sefc-vi-.^^ 


2 


3 


I/' 


v^ 


■^--i-'i-^>''L.<iytt-f 


^^  -4^ 


3S- 


/  ZS 


/  0  0 
J/S 


/^ 


/  3  S- 
3  / 


Vfi 


2S 


f 


^  ^ 


-?^  <5 


^50 


GKAIN. 


189„^ 

1 

189.. 

Nov. 

2 

Journal 

1 

709,66 

Nov. 

3 

Cash 

2 

3 

2b 

Cash 

3 

139  46 

4 

Journal 

2 

7 

50 

3 

37  50 

5 

" 

3 

844 

89 

.3 

" 

3 

112  80 

Grain  on  hand 

568 

28 

4 

( ( 

3 

19151 

Grain  on  sale 

135 

.5 

1 1 

5 

8538 

6 

Journal 
Cash 

3 
5 

178 
22 

75 
50 

Loss  and  Gain 
Inventory  Down 

81 

36 

Journal 

4 

1558 

92_ 

1558 
176 

92 

Nov. 

8 

703 

28 

Nov. 

9 

50 

9 

Cash 

b 

133 

19 

10 

" 

5 

255 

10 

Journal 

5 

52 

58 

Cash 

4 

6 

25 

Cash 

5 

52 

24 

" 

4 

7 

5 

15 

11 

1  ( 

4 

5 

4 

16 

Loss  and  Gain 

90 

58 

12 

13 
16 

Journal 
Cash 

4 
6 
6 
6 
6 

250 
6 
4 

257 
78 

15 
92 
25 
40 

1046 

87 

1046 

87_ 

1 

!i       1 

1 

• 

HISTORICAL  JOURNAL  AND  CASH  BOOK. 


77 


9/^. 


/^y- 


C^^.<i^^j^ 


(^t:x^^yT.-^y 


3 


t^ 


^;^^^='^^4^, 


J<y^-(^<^--yn^<;64^'X/?^''^^t'C,<>^e^<iy 


f 


o  o 


J(^. 


v^ 


^ 


a-c-c^  '-jy, 


'^J^yLc^i-tx^/u/'cTTTy  Jrri&i^^yK 


^7 

/  S 
2  0  0 

2  / 


SO 


2S 


C^ci^'^'Z^J^ 


/  3f 


f¥ 


3  0  0 

ZO 
/  /  Z 


-50 


\5S0 


sol 


v^ 


sv 


s^o 


CONSIGNMBNT    OF 

CRBSCBNT    Mir^LS. 

189.  _ 

189.. 

Sales  of  Flour. 

Nov. 

3 

C.  Cash  Freig:ht 

3 

20 

Nov. 

3 

J.  20  sacks 

1.40 

2 

28 

4 

C.  Cash  on  acct. 

3 

75 

J.  25      " 

1.40 

2 

35 

5 

J.  Commission 

3 

20 

C.35      " 

1.40 

2 

49 

C.  Check,  net  proceeds 

5 

160 

75 

4 
5 

J.  10      " 
C.25      " 
J.  20      " 
J.  15      " 

1.40 
1.40 
1.35 
1.35 

3 
2 
3 
3 

14 
35 
27 
20 

25 

J.  300  Wheat                    .85 

5 

Nov. 

9 

C.50      " 
C.  20  sacks 

1.35 
1.35 

4 

67 

50 

275 
255 

75 

275 

75 

Nov. 

10 

4 

27 

16 

J.  Commission 

7 

30 

10 

C.25      " 

1.35 

4 

33 

75 

C.  Check,  net  proceeds 

7 

75 

50 

11 
12 

C.60      " 
J.  20      " 

1.35 
1.30 

4 
6 

81 
26 

J.  10      " 

1.35 

6 

13  50 

1 

C.20      " 

1.35 

6 

27 

16 

C.  Insurance 

152 

25 

360|50 

360 

50 

78  ESSENTIALS  OF  BOOKKEEPING. 


Gave  checks  on  the  Commercial  Bank  to  pay  for  grain  purchased,  as  follows:  A.Spencer 
45  bu.  wheat  @  8oc,  M.  Powers  36  bu.  wheat  @  Sic,  C.  Hartson  33  bu.  wheat  (?/:  81  ^c, 
James  Lacey  60  bu.  wheat  @  79c.     [Cash  Book.] 

Bought  of  Howard  &  Payne,  of  Paynesville,  2  car  loads  wheat,  the  first  car  weighing 
27,600  lbs.  net,  and  the  second  car  weighing  29,940  lbs.  net.  (60  Ibs.pcr  bushtl),  (g)  74cper  bu., 
payable  as  they  may  draw  on  us.     [Journal.] 

Paid  cash  to  the  Commercial  Railway  for  freight  on  the  wheat  ;^37.50. 

Bought  of  the  Union  Coal  Co.  on  account  63  tons  hard  coal  ^,  ;^5.  Gave  our  check  to 
the  Commercial  Railway  for  freight  on  the  coal  ^94.50. 

Received  from  Lee  &  Hutchins,  Riverside,  i  car  lime,  350  bushels,  to  be  sold  on  their  ac- 
count and  risk,  for  which  we  are  to  receive  a  commission  of  5  cents  per  bushel.  [Memoran- 
dum in  Journal.] 

Paid  cash  to  the  Commercial  Railway  for  freight  on  the  lime  $\  5. 

Made  the  following  cash  sales  to-day:  12  tons  soft  coal  @  $4.25,  5  cords  stove  wood  @; 
;^2.75,  40  bu.  lime  @  35c.     [All  sales  of  lime  belong  to  the  Lee  &  Hutchins  consignment] 

Drew  on  Stacey  &  Stevens  at  sight  for  i^ioo,  in  favor  of  M.  E.  Miner,  who  paid  us  cash 
for  the  draft. 

Deposited  cash  in  bank  ;^200. 

3 

Gave  our  check  in  payment  of  Howard  &  Payne's  sight  draft  on  us  for  i^joo,  payable  to  J. 
C.  Thomas. 

Sold  the  following  sight  drafts  on  Stacey  &  Stevens  for  cash  :  Draft  favor  H.  Martin  for 
;^i5o,  favor  R,  Safely  for  $\2^,  favor  C.  Judson  for  ;^ioo. 

Made  the  following  cash  sales  to-day:  10  tons  hard  coal  (jif^,  $%,  6  tons  soft  coal  @;  1^4.25, 
12  cords  stove  wood  ^  $2.75,  90  bu.  lime  @  35c.     [Two  entries  in  Cash  Book.] 

Sold  H.  Martin  on  account  i  ^  tons  hard  coal  (jcf^  $8,  2  cords  stove  wood  ^,  $2.75. 

Screened  the  2  car  loads  of  wheat  received  yesterday,  and  shipped  the  same  to  Stacey  & 
Stevens  to  sell  on  our  account  and  risk,  the  net  weight  of  the  wheat  being  57,200  lbs.  [Mem- 
orandum.] 

Sold  the  screenings  for  cash,  receiving  ;^3.25. 

Gave  our  check  to  Ward  &  Lee  for  100  bbls.  salt  bought  of  them  @  80c.  Paid  cash  to 
the  Commercial  Railway  for  freight  on  the  salt  ^^21.25. 

Received  from  the  Crescent  Milling  Co.,  of  Falls  City,  200  sacks  flour  to  be  sold  on  their 
account  and  risk,  for  which  we  are  to  receive  a  commission  of  10  cents  per  sack.  Gave  our 
check  to  the  Commercial  Railway  to  pay  freight  on  the  flour  ^20. 

Gave  the  following  checks  to  pay  for  grain:  C.  Cummings  for  41  bu.  wheat  ^  80c,  H. 
Preston  for  115  bu.  oats  @  30c,  C.  Carter  for  130  bu.  corn  ^;  35c. 

Sold  flour  to-day  from  the  Crescent  Milling  Co.'s  consignment  ^  $\A^  P^^  sack,  as  fol- 
lows: Lee  &  Lacey  20  sacks  on  account,  R.  Jennings  25  sacks  on  his  note  at  5  days,  sundry 
cash  sales  35  sacks. 

Gave  check  to  A,  C.  Kirby  to  pay  one  month's  rent  of  warehouse  and  coal  sheds  ^50. 

Paid  cash  for  office  books  ;^6.5o. 

Deposited  cash  in  bank  ;^550. 

4 

Accepted  the  Union  Coal  Company's  draft  on  us  at  5  days,  payable  to  the  Commercial 
Bank,  for  balance  of  old  account  ^214.50.     [Journal  and  Bill  Book.] 

Prepaid  our  note  of  ;^400  favor  James  Crosby,  receiving  a  discount  equal  to  the  interest  on 
the  note  at  8  per  cent  until  maturity,  counting  days  of  grace.  Gave  our  check  for  the  pro- 
ceeds ;^399.i  I.     [Journal  and  Cash  Book,  posting  from  the  Journal.     Mark  paid  in  Bill  Book.] 

Bought  of  the  Akron  Cement  Co.  on  account  90  bbls.  cement  @  ;$i.75.  Gave  our  check 
to  the  Commercial  Railway  for  ;^37.50  to  pay  freight  on  the  cement. 

Bought  of  the  Prospect  Mining  Co.  55  tons  soft  coal  @  ;^2.20,  on  account  subject  to  their 
sight  draft.     Gave  our  check  to  the  Commercial  Railway  for  ^66  to  pay  freight  on  the  coal. 


HISTORICAL  JOURNAL  AND  CASH  BOOK. 


79 


Gave  the  following  checks  to  pay  for  grain:  M.  Powers  50  bu.oats  @  29c,  C.  Hartson 
115  bu.  corn  @  34}4c,  P.  Carter  154  bu.  oats  @  30c,  J.  Johnson  ii2}4  bu.  wheat  (gi  8ic. 

Needing  a  Hght  wagon  for  deh'vering  small  purchases  of  wood  and  coal,  we  have  given 
our  check  to  Roger  Martin  for  one  horse,  harness  and  wagon  |2io. 

Paid  cash  for  hay  for  feeding  our  horses  $16.     [Debit  Expense] 

Took  out  from  the  warehouse  25  bu.  oats,  estimated  at  30c  per  bu.,  for  feeding  our  horses. 

Made  the  following  cash  sales  to-day:  25  bbls.  salt  @  ^1.40,  20  tons  soft  coal  @  ;^4.2  5, 
10  tons  hard  coal  (ot>  $S,  12  cords  stove  wood  ^/'  ;$2.75,  25  sacks  flour @;^i. 40,  25  bu.  lime  @ 
35c.     [Make  three  entries  in  Cash  Book.] 

Made  other  sales  to-day  as  follows:  H.  Martin  on  account  100  bu.  lime  (cr,  345^c.  How- 
ard &  Payne  on  account  10  bbls.  salt  @  ^^1.25,  5  bbls.  cement  ^  1^2.75.  P.  M.  French  on 
account  10  sacks  flour  (^  ^140.  L.  Bacon  on  his  note  at  5  days,  payable  at  our  bank,  10  tons 
soft  coal  @  ^4.25,  20  bu.  lime  @  35c. 

Paid  cash  for  advertising  ;^  17.50. 

Paid  cash  for  building  sidewalk  in  front  of  our  vacant  lot  ^27.50. 

Sent  our  check  for  ;^7  5  to  the  Crescent  Milling  Co.  to  apply  on  their  consignment. 

Sold  our  sight  draft  on  Stacey  &  Stevens  to  R.  E.  Lee  for  cash  $125. 

Paid  cash  for  the  student's  personal  expenses  ^19.25. 

Paid  cash  for  wages  of  teamsters  and  warehouse  clerk  to  date  $y2.$o. 

Deposited  cash  in  bank  ;^275. 

Post  the  ledger  and  make  a  proof  sheet,  showing  the  ledger  in  balance,  and  record  the 
proof  sheet  in  the  continued  trial  balance  book. 

[tr.\nsactions  continued  on  page  80.] 


THB  COJVr/ALTBO  TRIAL,  BAI^ANCB  BOOK. 


Nov.  4. 

j 

Nov.  6. 

After  Closing:. 

Kov.  11. 

Nov.  16. 

Cash  Balance 

5      39  75 

j 

36  50 

■ 

1 

36 

50 

Bank  Balance 

5    149 12 

I 

48819 

488 

19 

Student 

1  1733 

75 

4214 

50 

1758 

75 

4214  50 

3017 

to  I 

Teams 

1  1060 

1060 

475 

675 

Stacey&St'v'ns 

1    520 

600 

1364 

89 

1000 

364 

89 

Merchandise 

2  1237 

25 

522 

50 

1763 

30 

1202 

75 

1009 

50 

Bills  Rec. 

3    784 

50 

j 

814 

50 

200 

614 

50 

Real  Estate 

3    827 

50 

827 

50 

i 

850 

Bills  Pay. 

4    400 

1714 

50  ! 

400 

1835 

50  ! 

1435 

50 

Union  Coal  Co. 

4    214 

50 

529 

50  1 

529 

50 

794 

70 

265 

20 

Grain 

5  1190 

93  : 

10 

75 

1477 

56 

855 

64 

703 

28 

Howard  &P'yne 

5    326 

25 

709 

66 

1029 

25 

888 

41 

140 

84 

Const.  L.  &  H. 

6      15 

95 

75 

— 

— 

— 

— 

H.  Martin 

6      52 

52 

25 

27 

Lee  &  Lacy 

61     28 

48 

25 

25 

23 

25 

Const.  C.  M. 

7      95 

161 

— 



— 

— 

1 

Expense 

7    150 

177 

25 

66 

25 

1525 

Int.  and  Dis. 

8 

89 

7 

69 

— 

1 — 

Akron  Cem.  Co. 

8 

157 

.50 

157 

50 

157 

50 

Pros. Mining  Co 

81 

121 

121 

24025 

119 

25 

P.  M.  French 

9 

14 

41 

30 

11 

' 

R.  Houston 

9 

— 

' 

Commission 

9 

37 

50 

1 
1 

H.  Miner 

10 

Loss  and  Gain 

10 

8837 

55 

883755 

11989  44 

1198944 

5010 

20 

5010 

20_ 

1 

8o  ESSENTIALS  OF  BOOKKEEPING. 

5 

Received  account  sale  from  Stacey  &  Stevens  of  the  wheat  shipped  them  on  the  3d  inst. 
Net  proceeds  to  our  credit  ^844.89. 

Bought  of  the  Union  Coal  Co.  on  account  52  tons  hard  coal  @  i^S-io.  Gave  our  check  to 
the  Commercial  Railway  for  $'j?>  to  pay  freight  on  the  coal. 

Gave  the  following  checks  to  pay  for  grain  :  M.  Powers  55  bu.  oats  @  30c,  H.  Preston 
98  bu.  oats  @  31C,  R.  I.  Saner  1  10  bu.  corn  @  35. 

Sold  flour  at  $1.35  per  sack  as  follows:  P.  M.  French  20  sacks  on  account,  Lee  &  Laqey 
15  sacks  on  account,  sundry  sales  for  cash  50  sacks. 

Sold  for  cash  20  bbls.  salt  @  ^1.40,  i  5  tons  hard  coal  @  $8,  50  bu.  lime  ({/,  35c. 

Sold  R.  Houston,  of  Riverton,  10  bbls.  cement  (^  ;^3,  and  drew  on  him  at  20  days  sight 
for  the  amount,  forwarding  the  draft  by  mail  for  his  acceptance.  [Houston  should  be  debited 
until  the  draft  comes  back  with  his  acceptance.] 

Sold  drafts  on  Stacey  &  Stevens  for  cash:  Favor  A.  Johnson  $200,  favor  M.  Parks  $125, 
favor  C.  Cusey  $j$. 

Received  cash  of  Henry  Preston  to  pay  his  note  of  ;$200  now  past  due,  and  50  cents  inter- 
est on  same  since  maturity,  making  a  total  of  ^200.50.  [Cash  Book,  two  entries.  Mark  paid 
in  Bill  Book.] 

Closed  the  consignment  of  the  Crescent  Milling  Co.,  charging  for  commission  as  per  agree- 
ment, and  sending  them  a  check  for  the  balance  due  them  on  the  net  proceeds. 

Gave  our  check  to  pay  Howard  &  Payne's  sight  draft  on  us  for  ^275. 

Received  cash  from  H.  Martin  $25,  to  apply  on  his  account. 

Paid  cash  ;^22.50,  premium  for  insurance  on  grain  and  merchandise  in  warehouse  to  the 
amount  of  ;^i  500. 

Paid  cash  for  postage  25c. 

Deposited  cash  in  bank  $^^0. 

6 

Paid  Lee  &  Hutchins's  sight  draft  on  us  for  ^75,  to  apply  on  their  consignment,  giving  a 
check  for  the  same. 

R.  Houston  has  accepted  and  returned  the  draft  we  drew  on  him  on  the  5th  inst.,  his  ac- 
ceptance also  being  dated  the  5th  inst..     [Journal  and  Bill  Book.] 

Bought  of  the  Prospect  Mining  Co.  on  account  53  tons  soft  coal  @  ^2.25.  Gave  a  check 
to  the  Commercial  Railway  for  $61.60  to  pay  freight  on  the  coal. 

Howard  &  Payne  have  sent  us,  freight  prepaid,  275  bu.  barley  for  which  we  have  given 
them  credit  at  65c  per  bu. 

Shipped  to  Stacey  &  Stevens,  our  regular  commission  dealers,  450  bu.  oats  to  sell  on  our 
account  and  risk.     Paid  cash  for  freight  on  the  shipment  of  oats  $22.50. 

Sold  Howard  &  Payne  on  account  3  i  tons  hard  coal  @,  $8,  20  tons  soft  coal  ^/)  $4. 

Sent  our  note  at  10  days  to  the  Prospect  Mining  Co.,  to  pay  for  their  invoice  received  on 
the  4th  inst. 

Received  cash  of  P.  M.  French  $^0,  and  of  Lee  &  Lacey  $2^  to  apply  on  account. 

Sold  for  cash  25  bbls.  salt  @  $1.40,  15  tons  hard  coal  @  $8,  7  cords  wood  ((f.  $2.75,  25 
bu.  lime  @  35c. 

The  Union  Coal  Co.  have  offered  a  cash  discount  of  2  per  cent  on  their  invoice  of  2d  inst. 
We  have  accepted  their  offer  and  sent  them  our  check  for  the  amount  of  the  invoice  less  2  per 
cent.     [Journal  and  Cash  Book.] 

Sold  one  of  our  double  teams  for  cash  $^'JS- 

Closed  Lee  &  Hutchins's  consignment  and  sent  them  an  account  sale,  charging  them  with 
our  commission  as  per  contract,  and  sending  our  check  for  the  balance  of  the  net  proceeds  still 
unpaid. 

Paid  cash  for  postage  $1,  and  for  stationery  $'^.^0. 

Paid  cash  for  Howard  &  Payne's  sight  draft  on  us  for  $;oo. 

Deposited  cash  in  bank  $650.  > 

Drew  out  cash  for  personal  use  $2^. 

Post  the  ledger  and  make  a  proof  sheet,  showing  the  ledger  in  balance,  and  record  the 
proof  sheet  in  the  continued  trial  balance  book. 


HISTORICAL  JOURNAL  AND  CASH  BOOK. 


CLOSING  ROUTINE. 

Take  a  trial  balance  of  the  ledger,  preparatory  to  closing  the  same.  [This  trial  balance 
does  not  need  to  go  on  permanent  record.] 

Credit  the  following  inventories  to  the  proper  titles:  Coal,  wood,  salt,  and  cement  on  hand 
worth  ^1,009.50;  grain  on  hand  worth  ;^568.28;  oats  shipped  to  Stacey  &  Stevens,  not  yet  re- 
ported sold,  worth  $135  ;  teams  worth  ^675  ;  town  lot  worth  ^850;  rent  and  insurance  prepaid 
and  unexpired  amount  to  $^2.^^  ;  hay  and  oats  on  hand  for  teams  worth  ^7.50;  books  and 
postage  on  hand  $6.     The  wages  due  our  clerk  and  teamsters,  and  not  yet  paid,  amount  to 

Close  the  ledger,  carrying  the  net  gain  and  debit  in  personal  account  to  the  investment 
account  in  order  to  show  the  proprietor's  present  interest  in  the  business.  As  the  accounts  are 
to  be  continued  in  the  same  ledger,  carry  the  resource  and  liability  balances  and  inventories 
down  in  their  respective  accounts,  and  take  a  trial  balance  of  the  ledger  after  all  balances  are 
brought  down,  recording  the  trial  balance  in  the  continued  trial  balance  book. 

8 

H.  Miner  has  entered  into  partnership  with  the  student,  to  continue  the  business  under 
the  firm  name  of  (Student)  &  Miner.  The  partners  are  to  make  equal  investments,  and  share 
equally  in  gains  and  losses. 

H.  Miner  invests  $2,500  in  bank  drafts  which  are  deposited  in  the  bank  as  cash. 

The  student  draws  out  ;$5  17.50  per  check,  leaving  his  net  investment  equal  to  Miner's. 

Received  cash  from  Howard  &  Payne  in  payment  of  their  note  due  today  ^250. 

Received  a  second  consignment  of  flour  from  the  Crescent  Milling  Co.,  consisting  of  300 
sacks,  which  we  are  to  sell  for  them  on  commission  on  same  terms  as  those  of  the  former  con- 
signment. 

Bought  of  A.  C.  Kirby  the  lot,  warehouse  and  coal  sheds,  which  we  now  occupy,  for 
;^3,ooo;  giving  in  part  payment  our  vacant  lot  valued  at  ;^i,ooo,  estimating  as  part  payment 
;^35  for  unexpired  rent  which  we  have  prepaid,  giving  our  check  for  ;^965  and  our  note  at  60 
days,  bearing  interest  at  8  per  cent,  for  the  remaining  ;$r,ooo.  [Journal,  Cash  Book  and  Bill 
Book.] 

9 

Received  advice  from  Stacey  &  Stevens  of  the  sale  of  oats  shipped  on  the  6th  inst.,  report- 
ing the  net  proceeds  to  our  credit  $176.50. 

Accepted  the  Union  Coal  Company's  draft  on  us  at  3  days  for  $200,  payable  at  the 
Commercial  Bank,  to  apply  on  our  account. 

Gave  our  check  to  pay  the  Akron  Cement  Company's  sight  draft  on  us  for  $100,  to  apply 
on  our  account. 

Received  cash  of  Lee  &  Lacey  to  apply  on  account  $20. 

Gave  checks  for  purchases  of  grain,  as  follows  :  Henry  Martin,  corn  in  the  ear,  gross 
weight  of  load  3,936  lbs.  less  weight  of  empty  wagon  996  lbs.,  at  34c  per  bu.,  estimating  70 
lbs.  to  the  bushel.  C.  Carter,  corn  in  the  ear,  first  load  weighing  4,012  lbs.  less  1,002  lbs., 
second  load  4,039  lbs.  less  959  lbs.,  third  load  4,145  ibs.  less  995  lbs.,  @  35c  per  bu.  How- 
ard Button,  barley,  48  lbs.  per  bu.,  first  load  weighing  3,138  lbs.  less  978  lbs.,  second  load 
2,907  lbs.  less  987  lbs.,  third  load  3,167  lbs.  less  1,015  lbs.,  (^;  56c  per  bu. 

Sold  20  sacks  flour  for  cash  (t/)  $1.35. 

Sold  James  Creston  i  5  bbls.  cement  (f/)  $3,  receiving  in  payment  his  note  at  3  days,  pay- 
able at  our  office. 

Sold  15  tons  hard  coal  for  cash  @  $8. 

Deposited  cash  in  bank  $400. 

10 

Received  cash  of  Henry  Preston  $100,  and  his  new  note  at  30  days  bearing  interest  at  6 
per  cent  for  $50,  to  pay  his  note  due  this  day. 

Paid  our  note  of  $500  favor  James  Crosby,  receiving  a  discount  equal  to  interest  on  the 
note  at  10  per  cent  for  the  days  it  has  yet  to  run,  before  maturity,  and  giving  our  check  for  the 
proceeds  $498.06.     [Journal  and  Bill  Book.] 


82  ESSENTIALS  OF  BOOKKEEPING. 

Shelled  all  corn  on  hand  and  shipped  the  same  to  Morey  &  Lane,  New  York,  to  sell  on 
our  account  and  risk. 

Gave  checks  for  purchases  of  grain  as  follows:  C.  Hartson,  2  loads  oats,  2,791  lbs.  less 
959  lbs.,  and  2,758  lbs.  less  998  lbs.  @  t,oj4c  per  bu.,  estimating  32  lbs.  per  bu.  P,  Magoon, 
I  load  oats,  2,879  lbs.  less  959  lbs.  @  30c  per  bu. 

Bought  of  Howard  Preston,  giving  our  due  bill  in  payment,  3  loads  oats,  3,030  lbs.  less 
1,002  lbs.,  2,615  less  999  lbs.,  and  2,782  lbs.  less  998  lbs.  @  31c  per  bu. 

Sold  to  the  Crescent  Milling  Co.  300  bu.  wheat  (oj  85c,  to  apply  on  their  second  consign- 
ment account.  Gave  our  check  for  ;gi5  to  the  Commercial  Railway  to  prepay  freight  on  the 
wheat. 

Received  cash  for  5  loads  corn  cobs  @  ^1.25  per  load. 

Sold  for  cash  10  bbls.  cement  @  ^3,   25  sacks  flour  @  $1.35,  20  bu.  oats  @  35c. 

Paid  cash  for  straw  for  bedding  teams  $3.50. 

Deposited  cash  in  bank  ;^I70. 

II 

Drew  cash  from  bank  on  our  check  1^40,  for  use  in  cash  payments. 

Paid  cash  for  workmen's  wages  to  date  ;^62.50. 

Gave  C.  E.  Hartson  our  check  for  ^175  for  labor  and  material  in  fitting  an  office  for  rent 
m  our  warehouse  building. 

Made  the  following  sales  for  cash  :  60  sacks  flour  @  ^^1.35,  5  tons  hard  coal  @  $8,  20 
bbls.  salt  @  ;^i.40,  15  bu.  oats  @  36c. 

Sent  our  sight  draft  on  Stacey  &  Stevens  to  the  Prospect  Mining  Co.  to  pay  the  balance 
due  the  latter  firm. 

Received  cash  from  R.  Jennings  to  pay  his  note  due  today  $}$• 

Received  cash  of  A.  I.  Lane  ^17.50  for  rent  of  the  office  we  had  fitted  up  in  the  warehouse 
building. 

Sold  to  M.  E.  Magnus  for  cash  400  bu.  barley  @  62^c  per  bu. 

Paid  cash  for  gas  bill  1^2.75. 

Drew  on  Howard  &  Payne  for  the  balance  due  from  them,  making  the  draft  payable  to  our 
bank  at  sight  and  leaving  the  dralt  at  bank  for  collection.  [Make  a  memorandum  entry  in  the 
journal;  but  make  no  credit  until  advised  that  the  draft  has  been  paid.] 

Deposited  cash  in  bank  $450. 

Make  a  proof  sheet  of  the  ledger,  and  record  the  same  in  the  continued  trial  balance  book. 

12 

Gave  a  check  for  ;^2I4.50  to  pay  our  note  favor  the  Union  Coal  Co.,  due  today. 

Sold  our  sight  draft  on  Stacey  &  Stevens  for  $250  to  R.  M.  Patterson  for  cash. 

Bought  of  Union  Coal  Co.  on  account  75  tons  hard  coal  @  $5.15.  Gave  a  check  to 
the  Commercial  Railway  to  pay  freight  on  the  coal  $i  12.50. 

Settled  in  full  with  the  Akron  Cement  Co.,  giving  them  a  sight  draft  on  Stacey  &  Stevens 
for  the  balance  due  them  ;^ 5 7.50. 

Sold  Lee  &  Lacey  on  account  10  tons  hard  coal  @  ;^7.50,  20  sacks  flour  (aj.  ^1.30. 

Exchanged  our  single  horse  and  wagon  for  a  heavy  double  team  and  wagon,  giving  a 
check  for  ;^I90,  to  pay  the  difference. 

Paid  A.  C.  Kirby  cash  ;^io  for  ;^  1,000  of  unexpired  insurance  on  the  warehouse  we  bought 
of  him,  which  the  insurance  company  has  transferred  to  us.     [Debit  Real  Estate.] 

Sold  H.  Martin  on  account  10  sacks  flour  @  ^f.35,  15  bu.  oats  @  41c. 

Received  cash  of  L.  Bacon  for  his  note  due  today  $49.50. 

Gave  C.  E.  Hartson  a  check  to  pay  for  labor  and  materials  used  in  completing  an  addition 
to  our  warehouse  1^1,050. 

Made  the  following  sales  for  cash:  5  bbls.  cement  @  $3.10,  8  tons  hard  coal  @  ;^8,  5 
tons  soft  coal  @  $4.50,  4  bbls.  salt  @  ;^i.40,  20  sacks  flour  @  ;$i.35,  12  bu.  oats  @  41c.  [Three 
entries] 

Deposited  cash  in  bank  1^400. 


HISTORICAL  JOURNAL  AND  CASH  BOOK.  83 

_  13  ~ 

Gave  C.  E.  Hartson  our  note  for  ^400,  due  on  demand,  for  labor  and  materials  used  in 
building  a  barn  for  our  teams  on  our  lot  adjacent  to  the  warehouse. 

Gave  a  check  to  Howard  Preston  to  pay  the  due  bill  given  him  on  the  loth  inst.  ;^52.58. 

Received  an  account  sale  from  Morey  &  Lane,  of  the  corn  shipped  to  them  on  the  loth 
inst.,  enclosing  a  bank  draft  for  the  net  proceeds  ^257.25. 

Received  cash  from  the  Central  Feed  Co.  to  pay  for  storage  of  their  grain  and  merchan- 
dise in  our  warehouse  $\  7.25. 

The  Union  Coal  Co.  have  drawn  three  drafts  on  us,  as  follows  :  Draft  payable  on  demand 
for  1^65.20,  which  we  have  paid  at  once  by  check  ;  a  draft  at  30  days  for  ;^200,  and  a  draft  at 
60  days  for  the  balance  due  them,  both  of  which  we  have  accepted  to-day.  [Journal,  Cash 
Book  and  Bill  Book.] 

Received  cash  of  H.  Martin  to  balance  his  account  $46.6^. 

Sold  Howard  &  Payne  20  tons  hard  coal  (a^  ;^7. 25,  receiving  their  note  at  30  days  for 
;$ioo,  and  cash  for  the  balance. 

Received  cash  of  P.  M.  French  in  full  of  account  ^11. 

Paid  cash  for  i  ton  hay  for  feeding  teams  $g. 

Our  draft  on  Howard  &  Payne,  left  at  bank  for  collection  i  ith  inst.,ha^  been  paid  and  the 
bank  has  entered  the  proceeds  to  our  credit  as  a  deposit,  after  deducting  25  cents  for  collection 
charges. 

Deposited  cash  in  bank  ^425. 

IS 

A  fire  broke  out  in  the  barn  yesterday  and  spread  to  the  warehouse  and  coal  shed,  destroy- 
ing all  grain  and  merchandise  on  hand  and  the  balance  of  flour  belonging  to  the  Crescent 
Milling  Co.,  also  destroying  the  warehouse,  barn,  wagons,  harness  and  horses,  nothing  being 
saved  but  the  account  books,  notes  and  cash. 

Received  cash  of  J.  Creston  in  payment  of  his  note  ^45. 

Gave  our  check  for  ;^200,  to  pay  our  acceptance  favor  the  Union  Coal  Co.,  due  to-day. 

Paid  cash  to  A.  I.  Lane  ^12.50,  for  office  rent  unexpired  which  he  paid  in  advance  before 
the  fire. 

Paid  cash  for  workmen's  wages  to  date  ^^32. 50. 

16 

Received  ^1,000  in  cash  from  the  insurance  company  to  pay  for  the  insurance  on  the 
warehouse  destroyed  yesterday. 

H.  Miner  has  become  discouraged  on  account  of  the  recent  losses  and  proposes  to  with- 
draw from  the  firm.  By  mutual  agreement  the  partnership  is  dissolved  and  H.  Miner  withdraws, 
taking  cash  ;^  1,000  for  his  entire  interest  in  the  business.  [Enter  in  Journal  and  Cash  Book.] 

The  student  has  become  sole  proprietor  of  the  business,  having  authority  to  collect  all 
resources  due  from  other  persons,  and  assuming  payment  of  all  Habilities  of  the  firm. 

Paid  cash  for  advertising  the  dissolution  of  the  partnership  $$. 

The  insurance  company  has  adjusted  and  paid  our  loss  on  grain  and  merchandise,  covered 
by  the  policy  issued  on  the  5th  inst.,  allowing  the  following  amounts  :  ;^78.40  for  grain,  ^1,004 
for  merchandise  belonging  to  the  firm,  and  $1  52.25  for  the  flour  in  our  possession  and  belong- 
ing to  the  Crescent  Milling  Co. 

Rendered  an  account  sale  to  the  Crescent  Milling  Co.,  charging  them  ;^30  for  commission 
on  flour,  and  sending  them  a  check  for  $75.50,  to  pay  the  balance  of  the  proceeds  of  their 
second  consignment. 

Deposited  cash  in  bank  ;^  1,225. 

Make  a  proof  of  the  ledger  and  record  the  same  in  the  continued  trial  balance  book. 

Enter  the  following  inventories,  preparatory  to  closing  the  ledger :  The  lot  on  which  the 
warehouse  stood  is  worth  ;^  1,500.  Accrued  interest  on  our  note  favor  A.  C.  Kirby  amounts  to 
;^i.78,  and  accrued  interest  on  H.  Preston's  note,  our  favor,  amounts  to  5  cents. 

Close  the  ledger,  carrying  all  resources  and  liabilities  into  balance  account.  The  student's 
net  worth  at  closing  is  ;g  1,247. 89. 

TEST   QUESTIONS. 

1.  Did  the  student  gain  or  lose  by  purchasing  Miner's  interest  in  the  business,  and  how 
much  ? 

2.  What  would  have  been  the  student's  net  worth  at  closing,  if  he  had  not  purchased 
Miner's  interest  in  the  business? 


84 


ESSENTIALS  OF  BOOKKEEPING. 


Changing  From  Single  to  Double  E.ntry. 


The  process  of  changinpj  from  Single  Entry  to  Double  Entry  bookkeeping  is  very  sin:ple. 
The  historical  journal  will  take  the  place  of  the  single  entry  day  book.  The  double  entry  cash 
book  differs  from  the  single  entry  cash  book  only  in  giving  the  ledger  title  for  every  cash  entry. 
The  note  book  is  usually  kept  the  same  in  each  system.  Tiie  double  entry  ledger  retains  all 
accounts  kept  in  the  single  entry  ledger  and  adds  to  these  the  accounts  with  notes,  property 
and  incidental  titles,  such  as  Expense,  Interest  and  Discount,  etc. 

Before  changing  the  books  a  statement  should  be  made,  giving  the  resources  and  liabilities. 
This  statement  should  be  Journalized,  debiting  each  resource  and  crediting  each  liability  under 
its  appropriate  title,  and  crediting  the  proprietor  for  his  net  worth,  which  would  make  the 
debits  and  credits  equal. 

The  following  is  the  opening  journal  entry  made  from  the  statement  given  on  page  29, 
changing  the  system  to  double  entry. 

COl^l^BGB  CITY,  FBB    G,    1»9.... 


Continued  the  business  from  Set  Two,  with  resources  and  liabili- 

ties journalized  as  follows: 

140 

50 

R.  E.  Lee, 

A.  E.  Blair, 

1 

50 

J.  Q.  Adams, 

1       1 

98 

Union  Woolen  Mills, 

350 

Lee  &  Shepherd, 

157 

50 

Cash, 

279 

66 

Merchandise, 

641 

45  ; 

Expense, 

15 

James  Dawes, 

30 

M.  E.  King, 

34 

Hart  &  Co., 

499 

44 

L.  A.  Kemp, 

11 

42 

H.  S.  Lowry, 

J^ 

22 

Student, 

982 

51 

As  a  drill  in  changing  from  single  to  double  entr}^,  the  student  may  journalize  the  state- 
ments made  from  the  examples  for  practice,  given  on  pages  28  and  30. 

If  the  personal  accounts  are  to  be  continued  in  the  same  ledger,  and  there  are  a  considera- 
ble number  of  them,  it  will  not  be  necessary  to  itemize  these  personal  debits  and  credits  in  the 
opening  entr}',  but  merely  group  them  as  "Debits  on  Ledger"  and  "Credits  on  Ledger,"  and 
give  only  the  new  titles  that  did  not  appear  on  the  single  entry  ledger. 

The  opening  journal  entry  of  Set  Five  illustrates  such  a  change,  as  the  personal  accounts 
are  to  be  continued,  and  the  same  ledger  is  to  be  used  as  had  been  used  in  Set  Three. 


BALANCE  SHEETS. 


Balance  Sheets. 


The  Balance  Sheet  is  a  combination  of  the  proof  sheet  and  statement.  It  is  a  convenient 
form  of  showing  the  condition  of  all  ledger  accounts,  and  also  the  condition  of  the  business  at 
any  given  date. 

It  consists  usually  of  six  amount  columns,  two  being  used  for  the  ledger  debits  and  credits, 
two  for  balances  and  inventories  showing  resources  and  liabilities,  and  two  for  balances  showing 
losses  and  gains. 

The  inventory  amounts  should  be  written  in  red  ink,  to  indicate  that  they  are  not  balances 
from  the  ledger  debits  and  credits.  The  difference  between  the  losses  and  the  gains  is  written 
in  red  ink  in  the  smaller  of  these  columns.  If  the  business  belongs  to  one  proprietor,  the  bal- 
ance entry  in  loss  or  gain  column  is  written  in  one  amount ;  if  the  business  belongs  to  partners, 
th.e  balance  entry,  showing  the  net  gain  or  loss,  is  divided  according  to  contract,  and  a  red  ink 
entry  is  made  for  each  partner's  share.  These  amounts  are  extended  in  black  ink  to  the  lia- 
bility column,  if  they  are  giins,  and  to  the  resource  column  if  they  are  losses,  after  which  the 
resource  and  liability  columns  will  be  equal. 

The  balance  sheet  is  ruled  in  two  different  forms,  as  indicated  below.  In  form  one  the  six 
columns  are  all  placed  on  the  right  hand  side  of  the  titles;  and  in  form  two  the  ledger  debits, 
resources  and  losses  are  placed  on  the  left  of  the  titles,  and  the  ledger  credits,  liabih'ties,  and 
gains  are  placed  on  the  right  of  the  titles. 

In  the  balance  sheets  given  below,  the  debit  and  credit  columns  represent  the  proof  sheet 
of  a  ledger.  The  inventory  of  merchandise  unsold  amounts  to  $1,968.88  and  of  prepaid  ex- 
penses amounts  to  $300. 

\^Balance  Sheet — Form   Oiie.^^ 
Brown  &  'Bentley's  UalanvG  Sheet 


Dec.  31st,  189- 

Debits. 

Credits. 

Resources 

Liabilities 

Losses 

Gains 

A.  M.  Barton 

65 

37  ' 

56 

35 

902 

C.  E.  Long-ley 

113 

08 

100 

13108 

R.  Norton 

17 

98  ' 

33 

75 

15  77 

H.  A.  Summers 

114 

06 

310 

195  94 

H.  C.  Morton                                                      I 

; 

124 

25 

12425 

J.  G.  Storey 

99 

29 

99  29 

Merchandise 

3303 

04 

1792 

70 

1968  88 

458:54 

G.  A.  Smith 

126 

28 

65 

6li28 

Charles  Mason 

110 

45 

50 

60145 

Henry  Cushman 

40 

65 

30 

1 

10  65 

R.  E.  Carter 

175 

305 

130 

C.  (i.  Lane 

213 

84 

83 

50 : 

130  34 

Bills  Receivable 

570 

1 

520 

' 

50 

Expense 

383 

75  I 

300 

83,75 

Interest  and  Discount 

2  48 

24  02 

2154 

Bills  Payable 

371 

25  ! 

866  75 

495  50  ; 

Cash  Balance 

128 

10 

12810 

Bank  Balance 

1802 

28 

1802 

28 

M.  I.  Brown  (Partner) 

100 

1638  50 

1538,50 

H.  Bentley  (Partner) 

50 

1588150 

1538  50 

Brown's  ;^  Net  Gain 

1 

198  17 

198 

17 

Bentley's  )4  Net  Gain 

198 

16  : 

198 

16 

7687 

61 

7687 

61 

4534|08 

4534 

08 

480'08 

480  08 

(Red  ink  amounts  are  indicated  by  italics.) 

86 


ESSENTIALS  OF  BOOKKEEPING. 


\^Balcmce  Sheet — Form  Tzco.'] 
JBroyvn  A  JBentley*s  Balance  Sheet. 


Losses. 

Resources 

Debits 

Dec.  .-51.  189.. 

Credits 

Liabilities 

Gain 

s 

902 

6537 

A.  M.  Barton 

56  35 

13:08 

11308 

C.  E.  Longley 

100 

, 

1        1798 

R.  Norton 

33  75 

15177 

• 

114  06 

H.  A.  Summers 
H.  C.  Morton 
J.  G.  Storey 

310 
124  25 
99  29 

19594 

124  25 

99  29 

1968\8S 

330304 

Merchandise 

1792 

70 

i 

458  54 

61 

28 

12628 

G.  A.  Smith 

65 

60 

45 

110145 

Charles  Mason 

50 

10 

65 

40:65 

Henry  Cushman 

30 

175 

R.  E.  Carter 

305 

130! 

130 

34 

213 

84 

C.  G.  Lane 

83 

50 

50 

570^ 

Bills  Receivable 

520 

: 

83  75 

300 

383 

75 

Expense 

2 

48 

Interest  and  discount 

24 

02 

2154 

. 

371 

25 

Bills  Payable 

866 

75 

495 

50 

128 

10 

128 

10 

Cash  Balance 

1802 

28 

1802 

28 

Bank  Balance 

1 

1 

100 

M.  I.  Brown  (Partner) 

1638 

50 

1538 

50 

50 

H.  Bentley  (Partner) 

1588 

50 

1538  50 

19S 

17 

Brown's  %.  Net  Gain 

' 

1      198117 

198 

16 

i 

Bentley's  Y^  Net  Gain 

(Red  ink  amounts  are  indicated  by  italics.) 

1 

19816 

480 

08 

4534  08  1 

7687 

61 

7687 

61 

4534;  08, 

480 

08 

! 

PRACTICE,  IN  BALANCE  SHEETS. 

The  student  may  rule  paper  and  make  balance  sheets  from  the  following  ledger  proofs: 
Henry  Sherman's  Proof  Sheet,  June  30,  189..  John  J.  Aiken's  Proof  Sheet,  March  31,  189.. 


Henry  Sherman  (Proprietor) 

50 

1982151 

R.  E.  Lee 

!      140 

50 

117,03 

James  Dawes 

35 

30 

M.  E.  King 

29 

68 

34 

Hart  &  Co. 

714 

19 

917 

17 

A.  E.  Blair 

143 

25 

156 

L.  A.  Kemp 

110 

50 

93'92 

J.  Q.  Adams 

23 

78 

21 

R.D.  Mills 

132 

50 

H,  S.  Lowry 

43 

28 

30  22 

Lee  &  Shepard 

577 

50 

500 

Merchandise 

1974 

68 

1290  48 

A.  R.  Davis 

127 

25 

75 

M.  M.  Parton 

242 

50 

127 

50 

Produce 

1268 

25 

1102 

.50 

J.  G.  Gilbert 

327 

75 

250  25 

Expense 

130 

10 

Interest  and  Discount 

34 

54 

52 

27 

C.  M.  Brown 

125 

25 

Real  Estate 

2275 

1750 

P.  A.  Newton 

457 

28 

237,50 

Morgan  &  Lee 

737 

50 

1529  75 

Cash  Balance 

672 

57 

10372 

10 

10372|l0 

John  J.  Aiken  (Proprietor) 

2000 

1 

Bills  Payable 

950 

12751 

College  Bank 

3730 

72 

:    1210.21 

Cvrus  Carter 

345 

120 

G.  H.  Hartson 

i      280 

35 

155.35 

A.  B.  Jenkins 

1    1375 

765 

L.  F.  Totten 

;      145 

45 

W.  E.  Sutton 

1      290 

75 

3()5i75 

R.  M.  Parton 

1      181 

54 

81 

C.  A.  Rogers 

29 

29 

19 

R.  V.  Smiley 

150 

360  83 

Interest 

17 

50 

42  50 

Expense 

Bil  s  Receivable 

171 

25 

2965 

1915 

Discount 

18 

25 

12  26 

P.  A.  Farley 

,      125 

1175 

Merchandise 

4567 

70 

5615  20 

B.  C.  Kramer 

251 

126 

French  &  Ford 

2625 

40 

3915  65 

Loss  and  Gain 

115 

295 

John  C.  Newlin 

31 

75 

H.  B.  Parker 

126 

25 

298  85 

Real  Estate 

3125 

3375 

Grain 

717 

326 

15 

Cash  Balance                           j 

1160 

! 

23493 

75; 

23493' 75 

1 

Sherman's  inventory  shows  the  following  re- 
sources and  liabilities  not  shown  on  the  ledger. 
Merchandise  unsold  $1075,  produce  unsold  $275, 
prepaid  expenses  $67.50,  real  estate  unsold  $900, 
unpaid  wages  due  clerks  $31.50. 


Aiken's  inventory  shows  the  following  re- 
sources and  liabilities  not  shown  on  ledger: 
Merchandise  unsold  $1265.25,  accrued  interest 
on  notes  payable  $17.50,  accrued  interest 
on  notes  receivable  $39.25,  balance  due  clerks 
$27.50,  rent  prepaid  $33.33,  insurance  prepaid  $7, 
grain  unsold  $325. 


DOUBJ^E  ENTRY  FOR  PARTNERSHIP  ACCOUNTS. 


87 


SET  FIVE. 


DOUBLE  ENTRY  FOR  PAF.TNERSHIP  ACCOUNTS. 


This  set  is  a  continuation  of  the  business  from  Set  Three,  page  41.  The  statement  made 
at  the  close  of  Set  Three  is  journahzed  as  the  opening  entry  of  Set  Five. 

The  historical  journal,  cash  book,  note  book,  and  ledger  should  be  used  as  in  Set  Four, 
The  cash  book,  note  book,  and  ledger  blanks  used  in  Set  Three  should  be  continued  in  Set 
Five,  and  the  day  book  used  in  Set  Three  should  be  used  for  a  historical  journal  in  Set  Five. 

Space  was  reserved  in  opening  accounts  in-Set  Three,  to  allow  for  continuing  these  ac- 
counts in  Set  Five.  The  new  ledger  accounts  required  in  Set  F'ive  will  require  space  as  follows: 
Bills  Receivable  7  lines,  Merchandise  32  lines,  Expense  15  lines.  Interest  and  Discount  15  lines. 
Bills  Payable  10  lines,  Loss  and  Gain  6  lines. 

If  the  ledger  accounts  of  Set  Three  are  to  be  continued  in  Set  Five,  the  opening  journal 
entry  will  be  as  follows  : 

COLLEGE  CITY,  OCT.   14,   189., 


Continued  the  business  from  Set  Three,  journalizing  the  state- 
ment of  Oct.  13,  189  _ 


Debits  on  Ledger 

Cash  Balance 

Bank  Balance 

Bills  Rec. 

Merchandise 

Expense 

Interest  and  Discount 

Credits  on  Ledger 
Bills  Payable 


185 
2903 

62561 

570 
2537 

270 
i      2 


352763 
692  25 


sonal 


If  a  new  ledger  is  to  be  used  for  Set  Five,  the  opening  journal  entry  should  contain  each  per- 
debit  and  credit  given  in  the  statement  on  page  42,  each  partner  having  credit  for  his  net  worth. 


TRANSACTIONS. 


GGTOBBR  14,  189— 

Continued  the  business  from  Set  Three,  with  resources  and  liabilities  as  given  in  the  state- 
ment on  page  42. 

Bought  of  R.  Newland  on  account  20  lbs.  butter  @  15c,  12  doz.  eggs  (JLlj,  I2)^c.  Sold  R. 
Newland  on  account  i  bbl.  apples  (t/,  ;^2.25,  20  lbs.  C  sugar  diT  5^0,  3  lbs.  Rio  coffee  @  20c. 

Received  from  Norton  &  Quinn  on  account  50  baskets  grapes  @  20c,  10  bbls.  Bartlett 
pears  (g;  $d,. 

Gave  a  check  to  the  Commercial  Railway  to  pay  freight  on  grapes  and  pears  $"] . 

Sold  H.  Emery  on  account  10  lbs.  G  sugar  ^  6c,  3  lbs.  butter  (?/;  i  8c,  i  gallon  vinegar^ 
30c,  3  lbs.  Rio  coffee  ^  20c, 

Received  invoice  of  groceries  from  Archer  &  Parton,  amounting  to  ;^99.29,  billed  on  ac- 
count with  an  offer  of  2^  per  cent  discount  if  paid  in  10  days. 

Gave  a  check  to  the  Commercial  Railway  to  pay  freight  on  above  invoice  $3.29. 


88  ESSENTIALS  OF  BOOKKEEPING. 

Sold  O.  Sherman  on  account  2  bbls.  Bartlett  pears  @  i^S,  i  5  baskets  grapes  (oj  28c,  5  bbls! 
apples  @  $2.     Received  from  him  cash  to  apply  on  account  ;^io. 

Received  cash  from  Charles  Trenton  to  apply  on  account  ^I5- 

Sold  Reed  &  Young  on  account  3  bbls.  apples  @  $2,  2  bbls.  Bartlett  pears  (S)  ;$5,-i  i  bas- 
kets grapes  @  28c. 

Sold  E.  C.  Martin  on  account  6  bbls.  apples  @  $2,  i  bbl.  Bartlett  pears  @  ;^5,  12  baskets 
grapes  @  28c.     Received  from  him  cash  to  apply  on  account  ^$50. 

Sent  C.  Crisman  our  check  for  $60  to  balance  his  account. 

Paid  cash  for  stove  for  heating  room  ^27.50.     [Expense.] 

Received  cash  of  H.  Emery  in  full  of  account  ^5.39. 

Paid  cash  for  cleaning  store  room  $2.2^. 

Norton  &  Quinn  have  offered  us  5  per  cent  discount  on  invoice  received  this  morning,  if 
paid  in  5  days.  Accepted  their  offer  and  sent  them  our  check  for  the  proceeds  of  the  in- 
voice after  discount,  $47.50. 

Cash  sales  of  merchandise  amount  to  $'J<^A9- 

Paid  cash  to  farmers  for  sundry  produce  ;^  17.50. 

Deposited  cash  in  bank  $125. 

15 

Deducted  the  discount  offered  by  Archer  &  Parton  in  their  invoice  recorded  i  2th  inst.  in 
Set  Three,  and  sent  them  our  check  for  $\  14.24,  for  the  proceeds  of  the  invoice  after  deducting 
a  discount  of  $6.01. 

Received  Norton  &  Quinn's  invoice  of  grapes  and  quinces  amounting  to  $20,  bought  of 
them  on  account. 

Paid  cash  for  express  charges  on  last  invoice  ;$3.50. 

Sold  Henry  Carter  on  account  5  baskets  quinces  c<l  65c,  10  baskets  grapes  @  28c,  i  bbl. 
Bartlett  pears  @;^5.25,  i obu.  potatoes  @  40c.    Received  cash  from  him  to  apply  on  account  ;^20. 

Paid  cash  for  coal  for  heating  store  room  "^y . 

Received  cash  from  Reed  &  Young  to  apply  on  account  $50. 

Sold  Charles  Marvin  on  account  5  bbls.  apples  @  ^2.10,  10  bu.  potatoes  @  41c,  3  baskets 
quinces  @  65c. 

Accepted  Norton  &  Quinn's  draft  on  us  at  10  days  for  ;^34. 50,  the  amount  of  their  invoice 
credited  i  ith  inst.,  the  draft  being  in  their  favor. 

Sold  Myron  Jones  on  account  20  lbs.  C  sugar  @  5c,  10  lbs.  butter  @  i8c,  2  baskets 
grapes  @  35c,  i  sack  flour  @  $1.65. 

Sold  Smith  &  Lee  on  account  20  bu.  potatoes  @  41c,  5  bbls.  apples  @  ;$2.io,  2  bbls.  Bart- 
lett pears  @  ;^5.     Received  from  them  cash  ;^25  to  apply  on  account. 

Paid  cash  for  postage  and  stationery  for  office  use  $3.50. 

Sold  Chas.  Trenton  on  accQunt  y^  lb.  Japan  tea  @  70c,  25  lbs.  flour  @  3^c,  3  lbs,  raisins 
@  IOC,  I  sack  salt  @  loc. 

Received  cash  from  Myron  Jones  to  apply  on  account  ;$  12.50. 

Gave  a  check  for  $22.50  to  pay  our  acceptance  favor  Norton  &  Quinn  due  i6th  inst. 

Cash  sales  of  merchandise  amount  to  $60.93. 

Received  cash  from  Myron  Jones  in  full  of  account  $8.94. 

Deposited  cash  in  bank  $90. 

17 

M.  I.  Black  has  paid  his  note  that  falls  due  Nov.  12,  giving  us  cash  for  the  face  $200,  and 
for  interest  on  the  same  to  date  $1.23. 

Bought  of  C.  Crisman,  of  Leesburg,  on  account,  2  car  loads  potatoes,  800  bu.  @  30c. 

Gave  a  check  to  the  Commercial  Railway  to  pay  freight  on  the  potatoes  $60. 

Bought  of  R.  Nevvland  on  account  50  lbs.  dressed  chickens  @  I2}4c,  30  lbs.  butter  @ 
i6^c,  20  doz.  eggs  @  I2i^c.  Sold  him  on  account  i  sack  P.  P.  flour@$i.65,  20  lbs.  graham 
@  3c,  30  lbs.  C  sugar  @  5^c;  and  paid  him  cash  on  account  $5. 

Received  Norton  &  Quinn's  invoice  of  quinces  and  grapes  amounting  to  $27.50,  bought 
of  them  on  account  subject  to  5  per  cent  discount  if  paid  in  5  days. 

Paid  cash  for  express  charges  on  last  invoice  $3.25. 


DOUBLE  ENTRY  FOR  PARTNERSHIP  ACCOUNTS.  89 

Sold  Henry  Carter  on  account  25  bu.  potatoes  (^  45c,  12  baskets  grapes  Qj,  33}^c.  Re- 
ceived cash  from  him  in  full  of  account  ;^20. 65. 

Paid  cash  for  drayage  of  potatoes  from  cars  ^10. 

Sold  O.  Sherman  on  account  10  baskets  quinces  (^\  65c,  5  baskets  grapes  @;  33^c,  15  bu. 
potatoes  (if^  45c.      Received  cash  from  him  to  apply  on  account  $12.50. 

Paid  cash  for  advertising  the  business  $[  1.75. 

Received  cash  from  Chas.  Marvin  on  account  $10. 

Sold  Smith  &  Lee  on  account  5  baskets  quinces  @  65c,  10  baskets  grapes  (j(f,  33j^c,  15 
bu.  potatoes  (U  45c. 

Paid  cash  for  feed  and  care  of  horse  used  in  the  delivery  wagon  $7-7S- 

Gave  a  check  for  $  1  9  to  Norton  &  Quinn  to  pay  for  their  invoice  received  15th  Inst.,  after 
deducting  a  discount  of  $i. 

Cash  sales  of  merchandise  amount  to  S75. 63. 

Received  cash  from  C.  Trenton  in  full  of  account  $5.32. 

Deposited  cash  in  bank  ;$30O. 

Take  a  proof  sheet  of  the  ledger  and  cash  book  and  record  the  same  in  your  trial  balance 
book. 

18 

Gave  a  check  to  pay  C.  Crisman's  sight  draft  on  us  for  $100  to  apply  on  his  last  invoice, 
and  accepted  his  draft  at  5  days  for  ^80,  and  his  draft  at  10  days  for  $60,  for  balance  of  last 
invoice  of  potatoes,  the  drafts  being  drawn  payable  to  A.  C.  Upton. 

Discounted  Meade  &  Morton's  invoice,  recorded  i  ith  inst.  in  Set  Three  at  the  rate  they 
offered,  and  sent  them  our  check  for  ;^  17  1.45,  to  pay  the  proceeds  of  the  invoice  after  deducting 
a  discount  of  $5.30. 

Received  Norton  &  Quinn's  invoice  of  grapes,  quinces,  and  pears  amounting  to  $52.50, 
bought  of  them  on  account  subject  to  5  per  cent  discount  if  paid  in  10  days. 

Gave  check  to  the  Commercial  Railway  to  pay  freight  on  the  last  invoice  $5.75. 

Sold  E.  C.  Martin  on  account  20  bu.  potatoes  @  45c,  8  baskets  grapes  ^  33 /'3C,  2  bbls. 
Bartlett  pears  (g)  $5.10.      Received  of  him  cash  to  apply  on  account  $35. 

Paid  cash  for  clerk's  wages  to  date  $25. 

Received  invoice  from  Meade  &  Morton  of  groceries  amounting  to  $\  19.25,  purchased  of 
them  on  account  with  a  discount  offer  oi  2j4  per  cent  if  paid  in  10  days. 

Paid  cash  for  freight  on  last  invoice  $6.25. 

Sold  Reed  &  Young  on  account  7  baskets  quinces  (?/)  65c,  5  bbls.  apples  ([/,  $2.15,  i  bbl. 
Bartlett  pears  @  $5.      Received  cash  from  him  to  apply  on  account  $25. 

Gave  check  to  pay  our  acceptance  favor  Norton  &  Quinn,  due  to-day,  $28.75. 

Cash  sales  of  merchandise  amount  to  $77.12.  * 

Deposited  cash  in  bank  $130. 

19 

Gave  a  check  for  $20  to  pay  our  acceptance  favor  Norton  &  Quinn  due  to-day. 

C.  L.  Lewis  has  paid  his  note  not  yet  due,  giving  us  cash  for  the  face  $250,  and  for  inter- 
est to  date  $1.63. 

Paid  R.  Newland  cash  on  account  $5.  Bought  of  him  on  account  10  bu.  turnips  (o,  30c, 
20  head  cabbage  (c/   7j4c. 

Sold  O.  Sherman  on  account  50  bu.  potatoes  @  42i/^c,  6  baskets  grapes  ((/,  33 ^c  Re- 
ceived cash  from  him  in  full  of  account  $26.02. 

Paid  cash  for  repairs  on  delivery  wagon  $325. 

Sold  Reed  &  Young  on  account  6  bbls.  apples  (^f,  $2.10,  2   bbls.  Bartlett  pears  @  $5.10. 

Paid  our  acceptance  favor  Meade  &  Morton  before  it  fell  due,  giving  a  check  for  the  pro- 
ceeds $174.56,  after  deducting  a  discount  of  44  cts. 

Paid  cash  to  farmers  for  butter,  eggs,  and  dressed  chickens  $17.50. 

Sold  Smith  81  Lee  on  account  25  bu.  potatoes  @  43c,  5  bbls.  apples  @  $2.1 2^c,  3  baskets 
quinces  ^'  66^c.      Received  cash  from  them  in  full  of  account  of  $5  1.28. 

Paid  cash  -for  painting  sign  over  our  store  room  $22.50. 


90  ESSENTIA LS  OF  BO OKKEEPING. 

Sent  our  check  for  ^26.12  to  Norton  &  Quinn  to  pay  the  proceeds  of  their  invoice  received 
17th  inst.,  less  a  discount  of  ;^  1.38. 

Sent  a  check  for  $\  16.27  to  Meade  &  Morton  to  pay  their  invoice  credited  i8th  inst.,  after 
deducting  a  discount  of  ;^2.98. 

Cash  sales  of  merchandise  amount  to  ^8  [.19. 

Deposited  cash  in  bank  ;^3  25. 

20 

Paid  R.  Newland  cash  to  balance  his  account  ^5.77. 

Received  cash  from  E.  C.  Martin  in  payment  of  his  note  due  to-day  $70. 

Paid  cash  for  acceptance  favor  Norton  &  Quinn  due  today  $2^. 

Received  cash  of  Reed  &  Young  in  full  of  account  ;^37.o6. 

Sent  a  check  for  ;^93.30  to  Archer  &  Parton  to  pay  their  invoice  credited  loth  inst.,  in  Set 
Three,  after  deducting  a  cash  discount  of  ;^  1.90. 

Sold  E.  C.  Martin  on  account  15  bu.  potatoes  @  43c,  5  baskets  quinces  @  65c.  Received 
cash  from  him  in  full  of  account  ;^28.o8. 

Paid  cash  for  gas  bill  to  date  ;^3.25. 

Sold  Chas.  Marvin  on  account  5  bbls.  apples  @  $2.12^,  2  bbls.  Bartlett  pears  @  ^5,  20 
bu.  potatoes  @  43c.     Received  cash  from  him  in  full  of  account  ^40.45. 

Sent  a  check  for  ^49.87  to  Norton  &  Quinn  to  pay  their  invoice  recorded  18th  inst.,  after 
deducting  the  cash  discount  they  offered  ^2.63. 

Cash  sales  of  merchandise  amount  to  ;$77. 29. 

21 

Sent  a  check  for  $96.81  to  Archer  &  Parton  to  pay  their  invoice  credited  14th  inst.,  after 
deducting  a  discount  of  $2.48. 

Received  cash  of  Charles  Marvin  $<jO  in  payment  of  his  note. 

Deposited  cash  in  bank  $225. 

Take  a  proof  sheet  of  the  ledger  and  cash  book  and  make  a  balance  sheet,  using  the  fol- 
lowing inventories : 

Merchandise  unsold  $2,768.88,  horse  and  wagon  $240,  unexpired  rent  $10,  stove  and  office 
sign  $50.      Make  no  closing  entries  in  the  ledger. 

Make  a  list  of  the  amounts  of  unpaid  notes  payable  as  recorded  in  your  note  book,  and 
see  if  their  totals  agree  with  the  balance  of  your  ledger  account  with  Bills  Payable. 

The  firm  have  decided  to  dissolve  partnership,  Patterson  continuing  the  business,  and  the 
student  withdrawing  from  the  firm  to  engage  in  the  wholesale  grocery  business  exclusively. 

Patterson  takes  the  merchandise  on  hand  and  the  expense  items  prepaid,  as  given  in  the 
balance  sheet.     [Journalize,  debiting  Patterson  and  crediting  Mdse.  and  Expense.] 

Patterson  assumes  payment  of  the  firm's  notes  payable.  [Journalize  this  transaction,  deb- 
iting Rills  Payable  and  crediting  Patterson.] 

Patterson  pays  cash  to  the  firm  $878.91,  to  balance  his  investment  account  after  receiving 
credit  for  his  share  of  the  net  gain. 

The  student  draws  out  all  cash  on  hand- and  in  bank,  to  balance  his  investment  account, 
after  receiving  credit  for  his  share  of  the  net  gain. 

The  student  may  close  and  balance  the  ledger. 


DOUBLE  ENTRY  FOR   WHOLESALERS.  91 


SET   SIX. 


DOUBLE,  UNTRY  FOR  WHOLESALERS. 


The  following  set  has  been  prepared  to  present  in  a  practical  manner  the  general  routine 
of  a  wholesale  dealer,  and  to  illustrate  the  use  of  each  book  as  a  book  of  original  entry,  from 
which  debits  and  credits  are  posted  to  the  ledger.  We  will  briefly  describe  the  books  used, 
and  the  process  of  posting  from  each  one  to  the  ledger. 

THE   SALE.S   BOOK. 

All  sales  at  wholesale,  whether  for  cash  or  on  account,  are  itemized  in  the  sales  book,  in 
order  that  a  duplicate  bill  may  be  made  of  any  purchase,  if  it  is  requested  at  any  time.  The 
sales  book  should  give  the  address  of  all  out  of  town  customers. 

If  a  discount  is  given  on  the  sale  at  the  time  the  sale  is  made,  the  discount  should  be 
deducted,  before  the  amount  of  the  sale  is  extended  to  the  amount  column.  If  a  three  column 
sales  book  is  used,  the  first  money  column  may  be  used  for  items,  the  second  for  discount  en- 
tries, and  the  last  for  net  amounts. 

If  a  discount  is  offered,  conditional  upon  payment  being  made  at  some  specified  time,  a 
memorandum  of  the  discount  offer  should  be  made  in  the  sales  book,  but  no  amount  should 
be  deducted  from  the  sale,  unless  payment  is  made  before  it  is  posted. 

The  amounts  in  the  last  column  of  the  sales  book  are  added,  and  the  totals  are  forwarded 
from  page  to  page  until  the  end  of  the  month,  when  they  are  posted  to  the  general  ledger. 
(The  sales  book  is  illustrated  on  page  98.) 

THE   THREE   COLUMN    CASH   BOOK. 

A  special  column  is  reserved  on  the  received  side  of  the  cash  book  for  entries  that  belong 
to  the  sales  ledger,  and  another  special  column  for  Interest  and  Discount  entries.  Cash  re- 
ceived that  requires  entry  in  other  accounts  than  the  two  named  above,  will  be  carried  to  the 
general  column. 

Special  columns  are  also  reserved  on  the  credit  side  of  cash  account  for  entries  that  debit 
l-'xpense  and  Interest  and  Discount,  all  other  payments  being  extended  to  the  general  column. 

If  a  purchaser  is  debited  for  the  amount  of  a  sale,  and  he  accepts  our  discount  offer  and 
pays  the  bill  less  the  cash  discount,  we  should  enter  the  entire  amount  of  the  bill  on  the  re- 
ceived side  of  cash,  in  the  Sales  Ledger  column,  and  enter  the  discount  deducted  on  the  paid 
side  of  cash  in  the  Interest  and  Discount  column.  The  difference  between  the  revised  and 
paid  entries  will  be  the  cash  actually  received. 

If  a  note  or  acceptance  is  received  for  a  sale,  it  should  be  entered  in  cash  received  and  car- 
ried to  the  Sales  Ledger  column,  and  in  order  to  keep  the  cash  balance  correct  and  get  a  debit 
for  Bills  Receivable,  it  should  also  be  entered  as  cash  paid,  to  the  debit  of  Bills  Receivable. 
This  enables  us  to  show  the  credits  that  belong  to  the  sales  ledger,  in  the  special  column  in  the 
cash  book,  and  also  to  get  the  debit  for  Bills  Receivable  without  disturbing  the  cash  balance. 

Whenever  the  general  ledger  is  to  be  posted  and  a  trial  balance  taken,  usually  once  a 
month,  the  totals  of  the  special  column  are  extended  to  the  general  columns,  after  which  the 
cash  is  balanced  in  the  usual  manner.     (The  cash  book  is  illustrated  on  pages  96  and  97.) 


92  ESSENTIALS  OF  BOOKKEEPING. 


THE    THRE,E.    COLUMN    JOURNAL. 

The  Journal  is  used  for  such  entries  as  can  not  be  fully  recorded  in  the  sales  book  and  cash 
book.      A  special  column  is  used  for  merchandise  debits. 

Some  merchants  employ  a  separate  book,  called  an  invoice  or  purchase  book,  for  recording 
purchases  of  merchandise  ;  but  in  any  ordinary  business,  this  extra  book  may  be  dispensed  with, 
and  the  amount  of  each  invoice  may  be  entered  in  the  journal  and  extended  to  the  merchandise 
column. 

The  merchant  usually  receives  an  invoice  or  bill  of  the  merchandise  he  purchases,  in  which 
case  he  does  not  need  an  itemized  record  of  the  same  in  the  journal.  These  invoices  should  be 
numbered  in  the  order  in  which  they  are  received,  and  filed  or  pasted  \\\  a  blank  book  arranged 
lor  invoices.  The  journal  entry  will  merely  give  the  amount  and  terms  of  each  purchase,  and 
refer  to  the  invoice  by  number  for  explanations;  as  "  Invoice  No.  i,"  etc. 

If  all  merchandise  debits  from  the  cash  book  are  carried  to  the  merchandise  column  in  the 
journal,  we  will  avoid  the  frequent  posting  of  such  debits  in  the  ledger,  as  the  total  of  this 
special  column  will  be  posted  only  when  other  special  columns  are  posted.  (The  journal  is 
illustrated  on  page  95.) 

THE   BILL   BOOK. 

The  bill  book  is  used  in  wholesaling,  the  same  as  in  other  varieties  of  bookkeeping.  The 
bill  book  may  be  omitted  in  this  set,  as  there  are  only  two  notes  received  in  the  transactions. 

THE,  SALES  LEDGER. 

The  ledger  accounts  with  customers  may  be  kept  in  a  separate  book  from  the  general  ac- 
counts, so  that  a  trial  balance  of  tlie  latter  may  be  taken  at  any  time  without  the  labor  of  list- 
ing and  balancing  all  of  the  customers'  accounts. 

In  posting  the  sales  ledger  each  customer  will  be  debited  with  the  amount  of  his  purchases, 
as  recorded  in  the  sales  book,  and  credited  with  cash  or  notes  received  from  him,  as  recorded 
in  the  cash  book. 

According  to  the  best  usage  of  wholesale  merchants,  every  regular  customer  is  given  an 
account  in  the  sales  ledger,  even  if  he  buys  for  cash.  He  will  be  debited  with  the  net  amount 
of  each  sale  and  credited  with  the  cash  received,  in  order  to  show  the  merchant  the  volume  of 
sales  to  each  customer  during  the  year.  Such  information  is  worth  far  more  to  the  merchant 
than  the  cost  of  the  extra  labor  of  postnig  the  debits  and  credits  of  cash  customers.  If  the 
party  buying  for  cash  is  a  transient   customer,  he  would  not  have  an  account  in  the  sales  ledger. 

If  frequent  sales  are  made  to  firms  who  do  not  have  regular  ledger  accounts,  and  the  goods 
are  sent  out  CO.  D.,it  is  advisable  to  group  sucli  entries  in  the  ledger  under  the  title "C.O.D. 
Account."  A  line  is  reserved  for  each  sale,  the  date,  the  name  of  the  firm  to  whom  the  sale  is 
made,  the  folio  of  the  sales  book,  and  the  net  amount  of  the  sale  being  recorded  on  the  debit 
side,  and  the  same  line  on  the  credit  side  being  reserved  for  recording  the  payment  of  the  bill. 
(The  C.  O.  D.  account  is  illustrated  on  page  96.) 

THE   GENERAL    LEDGER.  ' 

The  accounts  in  the  general  ledger  are  posted  from  the  sales  book,  cash  book,  and  journal. 

From  the  sales  book,  the  total  sales  for  the  month  are  posted  to  the  debit  of  an  account 
with  the  Sales  Ledger  and  credited  to  Merchandise.  (The  Sales  Ledger  account  is  illustrated 
on  page  97.) 

From  the  cash  book,  the  entries  in  the  general  columns  are  posted,  as  in  the  ordinary  cash 
book.  The  totals  of  the  special  columns  in  the  cash  book  are  carried  to  the  general  columns, 
before  cash  is  balanced,  and  these  totals  are  posted  to  the  general  ledger,  the  same  as  other 
cash   entries. 

From  the  journal  all  entries  are  posted  to  the  general  ledger,  except  merchandise  debits, 
which  are  posted  in  total  once  a  month. 


DOUBLE  ENTRY  FOR   WHOLESALERS. 


93 


EXCEPTIONAL  ENTRIES. 

Occasional  transactions  are  journalized  that  require  entry  in  both  ledgers.  In  such  cases 
both  ledger  titles  should  appear  in  the  journal,  with  the  amount  extended  only  for  the  general 
ledger  titles. 

The  overcharge  of  merchandise  sold  to  Bemis  &  Brown,  and  reported  on  the  4th  inst., 
should  be  journalized  as  follows  : 


Mdse 

Sales  Ledger 
(Betnis  6  Brown) 

22  lbs.  C  Sugar  short  (flf,:  ;04 


I  1" 

88  ! 


Henry  Carter's  draft  on  A.  C.  Furlong,  returned  unpaid  by  the  latter  firm,  on  the  7th  inst,, 
should  be  journalized  as  follows  : 


Sales  Ledger 
(Henry  Carter) 

A.  C.  Furlong 

Carter's  draft  returned  unpaid. 


75 

75 

Occasional  cash  payments  are  made  that  require  debit  in  both  ledgers.  In  such  cases  both 
titles  should  be  given  in  the  cash  book,  with  the  amount  extended  only  for  the  general  ledger 
title.  Henry  Carter's  protested  check,  redeemed  by  us  on  the  5th  inst.,  should  be  entered  in 
the  cash  book,  credit  side,  as  follows  : 


Sales  Ledger    Carter's  check  protested  and  redeemed  by  us 
(Henry  Carter) 


4963 


The  student  must  never  debit  or  credit  Sales  Ledger  account  in  the  general  ledger,  with- 
out making  corresponding  debits  or  credits  in  some  account  or  accounts  in  the  sales  ledger. 

TRIAL  BALANCERS. 

i\  trial  balance  of  the  general  ledger  and  cash  balance  can  be  taken  at  any  time  without  re- 
ferring to  the  sales  ledger.  The  accounts  of  the  sales  ledger  are  proven  correct  by  taking  a  list 
of  the  debits  and  credits  or  of  the  balances  of  all  accounts  in  the  sale.'i  ledger  not  in  balance. 
The  excess  of  the  debits  on  the  sales  ledger  will  equal  the  debit  excess  of  the  account  with  Sales 
Ledger  in  the  general  ledger. 


94  ESSENTIALS  OF  BOOKKEEPING. 

TRANSACTIONS. 

NOVB'V\BBR  1.  189  - 

C.  A.  Carpenter  and  the  student  have  formed  a  partnership  as  wholesale  dealers  in  gro- 
ceries, under  the  firm  name  of  C.  A.  Carpenter  &  Co.  Each  partner  is  to  receive  a  salary  of 
;^ioo  per  month,  after  which  the  net  gain  or  loss  is  to  be  shared  by  each  according  to  his  aver- 
age investment. 

C.  A.  Carpenter  invests  a  stock  of  merchandise  inventoried  at  ;^5  160.25,  and  cash  $839.75. 

The  student  invests  cash  1^1500. 

Paid  cash  ;?250  for  one  month's  rent  of  store  building,  with  the  privilege  of  re  renting  office 
rooms  on  third  floor. 

Received  an  invoice  of  sugar,  etc.,  of  Kephart  &  Co.,  Philadelphia,  amounting  to  $501.50, 
on  account  for  60  days,  with  a  discount  offer  of  i  )^  per  cent,  if  paid  within  10  days. 

Paid  cash  $55  for  freight  and  drayage  on  above  invoice. 

Sold  James  Lee,  Vinton,  2  bbls.  A  sugar,  300  and  305  lbs.  @  4^c,  2  bbls.  G  sugar  315 
and  318  lbs.  @  4^c,  i  bbl.  amber  syrup,  45  gals.  @  42c,  i  bbl.  New  Orleans  (N.O.)  molasses, 
48  gals.  @  38c,  charging  for  drayage  to  depot  50  cts.  Billed  on  account  30  days,  with  a  dis- 
count offer  of  2  per  cent,  if  paid  in  10  days. 

Sold  Kingman  &  Co.,  Toledo,  3  bbls.  C  sugar,  315,  315  and  317  lbs.  at  4c,  2  bbls.  Porto 
Rico  (P.  R.)  molasses,  48  and  50  gals.  @  33c,  2  bbls.  A  sugar,  307  and  309  lbs.  @  4j^c, 
charging  for  drayage  60  cts.  Billed  on  account  30  days,  with  a  discount  offer  of  2  per  cent  if 
paid  in  10  days. 

Received  an  invoice  of  tea,  coffee,  etc.,  of  Grant,  Kennedy  &  Co.,  New  York,  amounting  to 
;^  1 459.74,  bought  on  account  for  30  days,  with  a  discount  offer  of  2  per  cent  if  paid  in  15  days. 

Paid  cash  $39.30  for  freight  and  drayage  on  above  invoice. 

Sold  P2.  M.  Bundy,  Deerfield,  2  bbls.  C  sugar,  320  and  325  lbs.  @  4c,  2  bbls.  amber  syrup, 
441^  and  45  gals.  @  42c,  i  chest  English  breakfast  (P2.  B.)  tea,  45  lbs.  @  45c,  2  sacks  Rio 
coffee,  140  and  142  lbs.  @  i8c,  charging  for  drayage  25  cts.  Deducted  a  discount  of  2  per 
cent  on  sugar  and  syrup,  and  3  per  cent  on  tea  and  coffee,  and  received  cash  for  the  proceeds 
after  discount. 

Paid  cash  for  letter  circulars  for  advertising  the  new  firm  $6.25. 

Sold  E.  C.  Martin,  city,  i  sack  Rio  coffee,  150  lbs.  @  18c,  i  chest  Y.  H.  tea,  70  lbs.  @ 
40c.     Billed  on  account, 

2 

Sold  Henry  Thompson,  Thompsonville,  2  bbls.  C  sugar,  321  and  324  lbs.  %  4c,  i  bbl.  N 
O.  molasses,  47  gals.  @  42c,  i  chest  E.  B.  tea,  44  lbs.  at  45c,  i  sack  Rio  coffee,  151  lbs.  @ 
i7/^c,  charging  drayage  25  cts.      Billed  on  account  30  days. 

Sold  Ray  Turner,  Dayton,  2  chests  Y.  H.  tea,  70  and  72  lbs.  @  40c,  i  chest  Japan  tea, 
65  lbs.  at  42^c,  2  bbls.  oat  meal,  150  and  150  lbs.  at  2^c,  2  cases  canned  peaches,  2  doz. 
cans  each  @  $3.25  per  dozen,  i  box  French  prunes,  45  lbs.  at  I2^c.  Gave  a  cash  discount 
of  3  per  cent  on  tea,  and  2  per  cent  on  other  articles,  receiving  of  him  cash  ^50  and  drawing 
on  him  at  5  days'  sight  for  balance.     Left  the  draft  at  bank  for  collection. 

Sold  H.  Sherman,  Creston,  i  sack  Java  coffee,  100  lbs.  at  22c,  2  cases  ground  coffee,  each 
60  lbs  at  23i^c,  3  sacks  rice,  each  100  lbs.  @  4^^c,  2  chests  E.  B.  tea,  44  and  45  lbs.  @  45c, 
2  bbls.  N.  O.  molasses,  48  and  47  gals.  @  38c,  3  bbls.  A  sugar,  300,  305  and  309  lbs.  @  4^c. 
Billed  on  account  30  days,  with  2^  per  cent  discount  for  cash  in  10  days. 

Received  cash  from  James  Lee,  to  pay  yesterday's  invoice  after  deducting  the  cash  dis- 
count we  offered. 

Received  an  invoice  of  flour,  etc.,  from  A.  C.  Furlong  &  Co.,  Chicago,  amounting  to 
$631.25,  bought  on  account  30  days,  with  a  discount  offer  of  i  V2  per  cent  if  paid  in  10  days. 

Paid  cash  for  freight  on  last  invoice  $26.50,  and  for  drayage  on  same  $1.25. 

Sold  C.  E.  Horton,  Galesburg,  2  bbls.  A  sugar,  311  and  315  lbs.  @  4>2C,  2  bbls.  N.  O. 
molasses,  48  and  49^  gals.  @  38c,  i  chest  Y.  H.  tea,  69  lbs.  @  40c,  i  sack  Rio  coffee,  148 
lbs.  @  1 8c,  2  sacks  rice,  100  and  102  lbs.  (oj  4^c,  charging  for  drayage  25  cts.  Gave  a  cash 
discount  of  2  per  cent  on  the  entire  bill,  receiving  cash  to  apply  on  same  $40  and  sending  the 
balance  C.  O.  D, 

[transactions  continued  on  page  99.] 


DOUBLE  ENTRl^  FOR   WHOLESALERS, 


6   /<^^- 


95 


^ 


"K^  Cl-<U^T^ 


J2^,X<-<^<:^.-c-7-'Lyf^ 


y 


2 


9^z.c€^.S^  6ti£^^J^ 


S  /   ^  0 


K^ 


c^d^c-^. 


JOc^.     2.°io      /O    c^Li:^^^ 


^C^6<Lty. 


^~yyi^e^~-<^.-^^c 


■  a,y&-er^A-£y 


2. 


y'lT-UC-'T^ 


0^O'^-t^-<Jc^    (5W^,.<J^^!^,15t^ 


3 


0  ^n^z-iyi^CC^    O^-^^J'J'^-t^^Z^TSZ^ 


X 
y 


'c^Cd-e^. 


-^at^-uAy 


y-^yLc^c-e^^^T^^^  xS'-t-^^t.-ij^ ce,.^L.e/V-»--i/ iS«-^^-e>-Z'«--e--^ 


'c^^^.  ._%^h^xlfi^^^^^ 


^^/ 


J  5 


/  V^f 


2J- 


J"^ 


^7 


JO 


7 


7^ 


7 


s 


^  3  f 


/  -5  O  0 


^^ 


7^ 


f  0  0  / 

//  ■?  v^ 


z^ 


0  0  0 


/  5  0  0 


^  0  / 


^0^ 


3  5 


/y^f 


3 


f 


/^ 


30 


7 


//  J^^ 


/^' 


^ 


96 


ESSENTIALS  OF  BOOKKEEPING. 


'cn/-<,  /  rf - 


,iPi>d.-^^i^ 


Jlu 


M^ 


1  i,-i,<yry_ 


LA^-:f^^^u^  ^il^^)^:. 


z 


■J 


^ 


^ 


K 


0.    /?f.    Cd<.i.-yT^.c:iy 


^--?'-?'-t'€i-'>^ 


V4>c 


cc^c 


C<^-e^.C-<  c^-c-t^i. 


't-t^ 


^39 
/  S  0  0 


JO 


7 


^^^■^ 


1.  0   <f  ^ 


7^ 


7^ 

5  2. 


U 


22 


/  3  / 
5  0 

/^ 
s-  ^ 

so 


■7 


52 


-^.  Ca  c/y.  (^Zoo^n^-c^if^z^ 


/s-f- 


"^.    0 ,  Jd^^^P-t^tcn^ 


,     Vi?  ,     J/^'^^--»-^-;i-«^>-^/ 


7^ 


/s^/- 

^^. 


/ 

J 
J 


/Of 

(p3 


^7 


DOUBLE  ENTRY  FOR   WHOLESALERS. 


97 


^)^ 


"Y^c^^iy 


^^^ 


^^^ 


3 


■^-^-"-'-^^i-^^ 


55 
/J" 


^^ 


3  2S 

5 

2  0 


.3  2  0  3 


JO 


7A 

so 


2S 


SO 


7/^ 


2S 
S2 


f/SZ 


n 


^ 


•"--^gr^-^-^r^-^-^ 


2  S  O 


"-7 

J 


.d2. 


25 


\S1? 

zs 


^ 


^s 


__--^3^;^;?:,^^<:^cS7l^.£?t^!^,^-,^'^-7 


/ff- 

/^f- 

7f^. 

s 

J2Jcz£e^  Ozr^np-^ 

3 

/  y  i  6 

^o 

^^. 

J 

itPcxy-^Ly  Cg^^o-tt^^ 

Z 

^"/(^ 

7^ 

s 

'tSPoi-iiJ^  C^CrZ''^ 

3 

yf 

/^3 

¥ 

JJi-ruut^p-t-tx-Cy 

3 

9^. 

7 

i/i7T>tv2-j'T-t::?>«^ 

J 

/^ 

- 

7 

'&c=i-d^(7Scrz>^ 

¥ 

/  /  1¥ 

s-/ 

7 

^cc£e.<£y  OftPir^y 

(o 

/ a  z¥ 

OS 

^^^A^^^^c^^^ 

f  2  2 

07 

(M^t!i.C<i-'t'uc-eyct,<p-t<yn'ty 

ZirCf  i^ 

¥?- 

Z  8  ^"Z 

/ 

^^. 

r 

'y  2  2 

V 

98 


ESSENTIALS  OF  BOOKKEEPING. 


> 


//  /rf  — 


/ 


2. 


.2. 
/ 


3  «  o 


3  /  'T 


'^d^    Z-o   cL.ct.y^4_y        ^  "r^  • 


V^a^. 


3  IS- 
3  IJ- 
3'T 


kA^      -^.^ix-ie^iiA-/ 


•3  01 


^r^Jb>,         .33 


^c^     3l,o  o^fic^t^.        ^    <rA 


a.  ^ 


(^^Sl^-^ 


^ 


<5~o 


^7 
^7 


5.^  r<7 


^7 

7 


^7 
if 


4 


7d. 


^  7 

/vi 


v3 


^^ 


?^ 


?r 


c(l^ 


4^ 


/3/ 


AJ- 


ss- 


2L. 


l£. 


DOUBLE  ENTRT  FOR   WHOLESALERS.  99 

Sent  cash  to  Kephart  &  Co.  to  pay  their  invoice  recorded  yesterday,  after  deducting  the 
cash  discount  they  offered. 

Sold  O.  Sherman,  city,  i  doz.  zinc  washboards  @  ;^2.5o,  ^  doz.  No.  i  wash  tubs  @  $g, 
%  doz.  No.  2  wash  tubs  @  ^8.25,  5  gross  matches  @  ^2.50,  3  doz.  brooms  @  ^2.25,  2  doz. 
clothes  lines  @  $2.6^.  Allowed  a  list  discount  of  10  per  cent  on  wash  boards  and  wash  tubs, 
billing  on  account. 

Sold  Reed  &  Young,  city,  i  bbl.  A  sugar,  311  lbs.  @  4>^c,  i  bbl.  G  sugar,  305  lbs.  @ 
4^c,  I  bbl,  P.  R.  molasses,  49  gals.  @  33c,  i  chest  Y.  H.  tea,  68  lbs.  @  40c,  5  bbls.  XXX 
flour  @  $S-^7y2,  I  case  oat  meal,  48  lbs.  @  3/^c,  2  boxes  laundry  starch,  each  48  lbs.  @ 
5i^c.     Billed  on  account. 

Received  cash  from  Kingman  &  Co.  to  pay  yesterday's  invoice,  less  the  cash  discount  we 
offered. 

Received  an  invoice  of  dried  and  canned  fruits  from  Hunter  &  Parsons,  New  York, 
amounting  to  ^469.29,  bought  on  account  for  30  days,  with  a  discount  offer  of  5  per  cent  if 
paid  in  10  days. 

Paid  cash  for  freight  on  last  invoice  ^14.50,  and  for  drayage  85c. 

Paid  cash  for  books  and  stationery  for  office  use  ;^27.5o, 

3 

Received  cash  from  C.  E.  Gray  for  rent  of  office  in  third  floor  of  store  building  for  i 
month  ^10. 

Paid  cash  for  postage  ;s^3.50. 

Sold  E.  M.  Bundy,  Deerfield,  2  sacks  Java  coffee,  100  and  103  lbs.  @  22c,  2  sacks  rice, 
each  100  lbs.  @4^c,  3  bbls.  XX  flour  @  $S-S'^y  3  boxes  laundry  starch,  each  48  lbs.  @  5>^c, 
2  boxes  laundry  soap,  each  60  lbs.  @  3^c.  Gave  a  cash  discount  of  2^  per  cent,  and  drew 
on  Bundy  at  sight  for  the  proceeds  of  the  invoice  in  favor  of  our  bank,  with  whom  we  left  the 
draft  for  collection. 

Sold  Bemis  &  Brown,  Stanton,  3  tbls.  C  sugar,  305,  307  and  312  lbs.  @  4c,  i  chest  E.  B, 
tea,  44  lbs.  @  45c,  2  sacks  Rio  coffee,  145  and  147  lbs.  @  i7/^c,  i  bbl.  oat  meal,  150  lbs.  @ 
3c,  I  sack  tapioca,  i  25  lbs.  @  5  /^c,  3  boxes  cheese,  58,  60  and  62  lbs.  @  lo^c,  charging  dray- 
age 25  cts.     Billed  on  account  30  days,  with  a  discount  offer  of  3  per  cent  if  paid  in   10  days. 

Received  a  draft  from  the  Bank  of  Galesburg  for  the  C.  O.  D.  bill  of  C.  E.  Horton,  sent 
out  yesterday,  less  collection  charges  deducted  by  the  bank  25  cts. 

Received  an  invoice  of  cheese  from  the  H.  A.  Hudson  Company,  Falls  City,  amounting  to 
;^392. 25,  billed  on  account  30  days,  with  a  discount  offer  of  3  per  cent  if  paid  in  10  days. 

Paid  cash  for  freight  on  the  cheese  1^25.50,  and  for  drayage  75cts. 

Received  cash  from  E.  C.  Martin  to  pay  his  invoice  of  ist  inst.,  less  a  cash  discount  of  3 
per  cent. 

Sold  Christy  &  Eckles,  city,  i  sack  dried  peaches,  90  lbs.  @  I2^c,  i  box  Turkish  prunes, 
60  lbs.  @  7^c,  I  box  dried  apricots,  40  lbs.  @  I3^c,  i  bbl.  English  currants,  225  lbs,  @ 
4^c.  10  bbl.  XXX  flour  @  $S-^7}^i  i  bbl.  cranberries  @  ^10.25.  Gave  a  discount  of  5  per 
cent  and  received  cash  for  the  proceeds. 

Gave  cash  to  pay  for  office  furniture  ;^37.75. 

Received  cash  of  Reed  &  Young  to  apply  on  their  account  ^50. 

Sold  Henry  Thompson,  Thompsonville,  i  chest  Y,  H.  tea,  68  lbs.  @  40c,  i  case  ground 
coffee,  60  lbs.  @  225^c,  i  sack  rice,  102  lbs.  @  4%!c,  i  bbl.  oat  meal,  150  lbs.  (cr^  3c,  1  box 
cheese,  60  lbs.  @  i  ic,  charging  drayage  25c.     Billed  on  account  20  days. 

Received  an  invoice  of  cranberries  from  C.  M.  Nelson,  Milwaukee,  amounting  to  1^82.50 
bought  on  account  subject  to  their  sight  draft. 

Paid  cash  for  freight  on  cranberries  ^^5,  and  for  drayage  50  cts. 

Sold  }.  A.  Strong,  Monmouth,  2  sacks  Rio  coffee,  149  and  152  lbs.  @  i7/^c,  i  chest 
Japan  tea,  66  lbs.  (^  42^c,  4  bbls.  A  sugar,  290,  295,  300  and  303  lbs.  @  4^c,  5  sacks  rice, 
each  102  lbs.  at  4-)4^c,  charging  for  drayage  25  cts.  Gave  him  a  cash  discount,  of  3  per  cent  on 
coffee  and  tea,  and  2  per  cent  on  the  balance  of  invoice,  receiving  cash  to  apply  on  the  invoice 
;^45,  and  sending  balance  C,  O,  D. 


100  ESSENTIALS  OF  BOOKKEEPING. 

Sold  Emerson  &  Hatch,  Brownsville,  2  chests  Japan  tea,  63  and  65  lbs.  (?/'  A2j4c,  3  cases 
ground  coffee,  each  60  lbs.  @  22y^c,  i  bbl.  oat  meil,  150  lbs.  (r/;  3c,  i  sack  tapioca,  125  lbs. 
@  5/^c,  3  boxes  laundry  soap,  each  60  lbs.  @  3^c,  1  box  French  prunes,  45  lbs.  ^;  I2^c,  i 
doz.  No.  I  wash  tubs  @  $g,  2  doz.  3  hoop  pails  @  $2.25.  charging  drayage  50  cts.  Billed  on 
account  30  days,  with  a  discount  offir  of  5  per  cent  if  paid  in  10  days. 

Sold  Smith  &  Lee,  city,  2  bbls.  cranberries  @  ;^  10.25,  '  bbl.  English  currnnts,  220  lbs.  (j[j, 
4%c,  I  sack  dried  peaches,  92  lbs.  (U)  I2^c,  2  boxes  cheese,  60  and  64  lbs.  @  lo^c.  Billed 
on  account. 

Received  a  note  at  5  days  from  Henry  Thompson  for  ;^ioo  to  apply  on  his  account. 

Received  an  invoice  of  wooden  ware  from  D.  M.  Stevens  &  Co.,  Detroit,  amounting  to 
;^  127.50,  bought  on  account  60  days,  with  a  discount  offer  of  5  per  cent  if  paid  in  10  days. 

Paid  cash  for  freight  1^7.50  and  for  drayage  25  cts.,  on  above  invoice. 

Carry  out  the  totals  of  all  special  columns,  post  the  ledgers  and  take  proofs  of  the  same, 
recording  the  same  in  the  trial  balance  book. 

4 

Sold  Chas.  Marvin,  city,  one  box  cheese,  55  lbs.  (a),  i  ic,  2  cases  canned  peaches,  4doz.  @ 
^3.25,  I  bbl.  cranberries  ^  ^10.50    i  doz.  brooms  @  ;^2.25.     Billed  on  account. 

Received  an  invoice  of  sugar  and  syrup  from  Kephart  &  Co.,  Philadelphia,  amounting  to 
;^96o.6o  and  billed  on  account  for  60  days,  with  a  discount  offer  of  2^  per  cent  if  paid  in  20 
days. 

Paid  cash  ^78  for  freight  and  drayage  on  above  invoice. 

Accepted  Hunter  &  Parson's  discount  ofifer  on  their  invoice  received  2d  inst.,and  sent  them 
our  check  to  pay  the  balance  of  the  invoice  after  discount. 

Bemis  &  Brown  report  a  shortage  in  one  barrel  of  C  sugar,  the  net  weight  being  290  lbs. 
instead  of  3  i  2  lbs.  as  billed.  We  have  made  the  allowance  to  their  credit  at  the  price  we  billed 
to  them.     [Pinter  in  the  journal.] 

Returned  to  C.  M.  Nelson  i   bbl.  cranberries,  received  the  3d  Inst.,  the  same  being  below 
the  grade  represented,  for  which  we  have  charged  him  ^8.80.     [Enter  in  Journal.] 

Sold  Henry  Carter,  city,  3  bbls,  A  sugar,  300,  310  and  320  lbs.  (?/]  4^c,  2  chests  Y.  H. 
tea,  72  and  73  lbs.  at  40c,  5  bbls.  XX  flour  @  $5.50.  Gave  him  a  cash  discount  of  3  percent, 
and  received  his  check  on  the  bank  for  ^48.53,  and  his  sight  draft  on  A.  C.  P'urlong  &  Co  , 
Chicago  for  the  balance.     [Consider  sight  drafts  of  other  firms  as  cash.] 

Sold  James  Lee,  Vinton,  2  bbls.  P.  R.  molasses,  48  and  50  gals.  (^)  33c,  i  chest  \i.  B.  tea, 
46  lbs.  ^)  45c,  2  sacks  rice,  each  100  lbs.  Q/^  4^c,  charging  drayage  25  cts.  Billed  on  ac- 
count 30  days. 

Gave  cash  to  H.  A.  Horton,  city,  for  200  bbls.  apples  ^,  $1.75. 

Received  cash  at  bank,  for  the  proceeds  of  our  draft  on  Ray  Turner  left  for  collection  2d 
inst.      The  bank  deducted  25  cts.  for  collection  charges. 

Paid  cash  for  drayage  on  sales  to  date  ;iS2.7  5.  [Mdse.] 

Paid  cash  for  insuring  merchandise ;^50.     [Debit  Merchandise] 

Received  cash  of  H.  Sherman  in  payment  of  his  bill  of  Nov.  2,  less  the  cash  discount  we 
offered. 

Gave  a  check  to  C,  E.  Hartman  for  salary  as  salesman,  ;^20. 

Forwarded  Henry  Carter's  draft  for  $"/$  on  A.  C.  Furlong  &  Co.,  received  to-day,  to  that 
firm  for  credit  on  our  account. 

5 

Received  a  draft  from  the  Commercial  bank  of  Monmouth  for  the  proceeds  of  the  C.  O.  D. 
bill  of  J.  A.  Strong  collected  by  them  after  deducting  50  cts.  for  collection  charges. 

Henry  Carter's  check  for  ;^48.53  which  we  received  yesterday  and  deposited  in  bank  as 
cash,  has  been  returned  unpaid,  with  protest  charges  $1.10.  Gave  cash  to  the  bank  to  pay  for 
the  amount  of  protested  check  and  charges.  [Debit  Sales  Ledger,  and  also  debit  Carter  in  the 
Sales  Ledger.] 

Sold  Kingman  &  Co.,  Toledo,  i  chest  E.  B.  tea,  48  lbs.  (t/1  45c.  2  sacks  Rio  coffee,  !  52  and 
153  lbs.  (^/',  !  7  J^c.  3bbls.  XXX  flour  ^/,  ^5.87  ^,  10  bbls.  apples  @  $2.25,  charging  drayage 
25c.     B  lied  on  account  30  days,  with  a  discount  offer  of  2  per  cent  for  cash  in  10  da}s. 


DOUBLE  ENTRY  FOR   WHOLESALERS.  loi 

Received  an  invoice  of  rice  and  ground  coffee  from  Grant,  Kennedy  &  Co.,  amounting  to 
^107.25,  bought  on  account  50  days,  with  a  discount  offer  of  3  per  cent  for  cash  in  10  days. 

Paid  cash  for  freight  ;^5  25  and  for  drayage  25  cts.,  on  last  invoice. 

Sold  O.  Sherman,  city,  5  bbls.  apples  @  %2  25,  i  bbl.  cranberries  @  ;^io.50,  3  bbls.  XX 
flour  @  $^.^0.      Billed  on  account.      Received  from  him  cash  to  apply  on  account  $2^. 

Our  sight  draft  on  E.  M.  Bundy,  left  at  bank  for  collection,  has  been  paid,  and  proceeds, 
after  deducting  25  cts.  collection  charges,  have  been  handed  to  us. 

Gave  cash  to  pay  for  subscription  to  Bradstreet's  Mercantile  Agency  ^^25.  [To  be  used 
in  determining  the  responsibility  of  dealers  who  may  order  from  us.]  • 

J.  A.  Strong  has  reported  an  overcharge  of  6  lbs.  tea  @  42  ^c,  in  our  invoice  to  him  of  3d 
inst.,  and  we  have  sent  him  a  check  for  the  amount  less  the  cash  discount  estimated  on  tea  in 
his  invoice.     [Debit  Mdse.] 

Sold  Henry  Thompson,  Thompsonville,  2  bbls.  G  sugar,  322  and  328  lbs.  @  4%^c,  5  bbls. 
XXX  flour  @  ;^5.85,  3  boxes  laundry  soap,  each  60  lbs.  @  lyic,  i  box  dried  apricots,  40  lbs. 
((J\  I3^c,i  bbl.  cranberries  @  ^10.50,  i  doz.  No.  2  Wash  tubs  @  ^8.25,  2  doz.  2  hoop  pails  ^) 
$2,  charging  drayage  50  cts.      Billed  on  account  10  days. 

The  student  has  received  cash  ^500,  a  bequest  from  a  friend  recently  deceased,  and  has 
invested  the  same  in  the  business,  thereby  increasing  his  capital.     [Cash  Book.] 

Sold  Smith  &  Lee,  city,  3  bbls.  G  sugar,  315,  318  and  320  lbs.  @  4^c,  2  bbls.  amber 
syrup,  43  and  44  gals  @  42c,  2  sacks  Java  coffee,  each  lOO  lbs.  @  22c.  Billed  on  account. 
Received  from  them  cash  ^50  to  apply  on  account. 

Bemis  &  Brown  have  discounted  their  bill  of  3d  inst.,  sending  us  a  bank  draft  for  the  pro- 
ceeds of  the  bill,  discounted  after  deducting  the  shotnge  reported  on  the  4th  inst. 

Received  an  invoice  of  cranberries  from  C.  M.  Nelson,  Milwaukee,  amounting  to  $80, 
bought  on  account  subject  to  his  sight  draft. 

Paid  cash  ior  freight  and  drayage  on  last  invoice  ^5. 

Discounted  and  paid  the  H.  A.  Hudson  Co.'s  invoice  of  3d  inst.,  sending  our  check  for  the 
proceeds. 

Emerson  &  Hatch  have  written  asking  us  to  deduct  discount  from  their  bill  of  the  3d  inst., 
at  the  rate  we  offered,  and  draw  on  them  at  sight  for  the  proceeds,  which  we  have  done,  leaving 
the  draft  at  our  bank  for  collection.  [Enter  the  discount  on  both  sides  of  the  cash  book,  on 
the  paid  side  to  get  in  discount  column,  and  on  received  side  to  crec  it  Sales  Ledger.] 

Paid  cash  for  stove  for  heating  ofifice  ^24.50. 

Received  cash  of  Henry  Taylor  for  rent  of  an  office  in  the  third  floor  of  our  building 
^12.50. 

Sent  A.  C.  Furlong  &  Co.  cash  per  draft  1^250.  to  apply  on  account. 

Sold  for  cash  to  sundry  purchasers,  50  bbls.  apples  @  1^2.50. 


Henry  Carter's  sight  draft  on  A.  C.  Furlong  &  Co.,  sent  them  for  credit  on  the  4th  inst , 
has  been  returned.  Carter  has  already  overdrawn  the  amount  due  him,  and  Furlong  &  Co. 
write  that  they  cannot  accept  the  draft.     [Journal.] 

Sold  Henry  Thompson,  Thompsonville,  3  bbls.  A  sugar,  300,  305  and  307  lbs.  @  4)^c,  i 
bbl.  amber  syrup,  46  gal.  @  42c,  i  sack  tapioca,  125  lbs.  @5i^c,  5  bbls.  apples  @  ^2.25, 
charging  drayage  25  cts.     Billed  on  account  20  days. 

Paid  cash  for  advertising  1^9.25. 

Paid  C.  M.  Nelson's  sight  draft  on  us  for  ^73.70. 
.Received   an   invoice  of  dried  fruits  from   Hunter  &   Parsons,  New  York,  amounting  to 
$75.75,  bought  on  account  60  days,  with  a  discount  ofTer  of  5  per  cent  if  paid  in  15  days. 

Paid  cash  for  freight  ;^3.2  5  and  for  drayage  25  cts  ,  on  last  invoice. 

Sold  J.  PL.  Johnson,  Wayneville,  1  chest  E.  B,  tea,  48  lbs.  ^)  45c,  i  chest  Japan  tea,  64  lbs. 
@  42^c,  I  sack  Rio  coffee,  150  lbs.  (t/)  I7>^c,  i  box  French  prunes,  45  Ids.  @  I2^c,  i  bbl. 
English  currants,  230  lbs.  @  4^c,  charging  drayage  30cts.  Allowed  a  discount  of  3  per 
cent  on  the  entire  bill,  receiving  cash  to  apply  on  same  $25,  and  sending  the  balance  C.  O.  D. 

Gave  a  check  to  pay  for  printing  and  stationery  for  use  in  the  office  $17.75- 


102  ESSENTIALS  OF  BOOKKEEPING. 

Sold  Reed  &  Young.' city,  2  bbls.  cranberries  @  ^10.50,  6  bbls.  apples  @  $2.25,  i  box 
Turkish  prunes,  60  lbs.  ^  7>^c,  2  boxes  cheese,  each  60  lbs.  @  i  ic.  Billed  on  account.  Re- 
ceived cash  from  them  to  apply  on  account  $'J'^. 

Sold  H.  Sherman,  Creston,  i  bbl.  P.  R.  molasses,  51^3  gals.  @  33c,  i  chest  Y.  H.  tea,  72 
lbs.  @  40c,  I  case  oat  meal,  48  lbs.  @  3>^c,  i  bbl.  cranberries  @  ^10.50,  2  bbls.  A  sugar,  312 
and  315  lbs.  @  4^c,,  charging  drayage  25  cts,,  and  billing  on  account  30  days,  with  2  percent 
discount  if  paid  in  10  days. 

Received  an  invoice  of  flour  from  A.  C.  Furlong  &  Co.,  Chicago,  amounting  to  $127.50, 
billed  on  account. 

Paid  cash  for  freight  $i  2.50  and  for  drayage  75  cts.,  on  last  invoice. 

Sent  A.  C.  Furlong  &  Co.  a  check  for  $150  to  apply  on  account. 

Paid  cash  for  drayage  bill  to  date  $\.     [Debit  Merchandise.] 

Received  cash  from  bank  for  proceeds  of  our  draft  on  P>merson  &  Hatch,  left  for  collection 
5th  inst.,  after  allowing  50  cts.  for  collection  charges. 

Paid  cash  to  each  partner  $25,  for  his  salary  to  date. 

Carry  out  the  totals  of  all  special  columns,  post  the  ledger  and  take  a  proof,  recording  the 
same  in  the  trial  balance  book. 

8 

Closed  the  store  to-day  and  took  an  inventory,  prepartory  to  closing  the  books. 

The  merchandise  on  hand  amounts  to  $8958.77. 

Books  and  stationery,  purchased  for  office  and  not  used,  are  worth  $30. 

Stove  purchased  for  office  is  worth  $24. 

Office  furniture  is  now  worth  $35. 
.    Unexpired  rent  of  store  building  amounts  to  $100. 

Office  rents  collected  by  us  and  unexpired  amount  to  $15. 

C.  A.  Carpenter  has  drawn  out  cash  for  the  amount  of  his  net  gain,  and  the  student  has 
also  drawn  out  cash  for  the  amount  of  his  net  gain. 

Henry  Hudson  has  been  admitted  as  a  third  partner  in  the  business,  having  invested  the 
store  building  now  occupied  by  the  firm,  valued  at  $6000,  and  cash  enough  to  make  his  invest- 
ment one-half  of  the  entire  capital  of  the  new  firm.  Hudson  devotes  no  time  to  the  business 
and  receives  no  salary.  The  other  partners  devote  their  time  to  the  business  and  receive  sal- 
aries as  stipulated  in  the  former  contract,  after  which  each  partner  shares  in  the  gain  or  loss, 
according  to  his  invested  capital. 

Hudson  has  also  paid  the  firm  cash  $600,  $100  being  for  rebate  on  rent  prepaid,  and  $500 
being  his  proportion  of  the  estimated  good  will  of  the  business,  the  latter  not  being  named  in 
the  inventory. 

9 

Sold  E.  C.  Martin,  city,  10  bbls.  XXX  flour  @  $5.85,  2  chests  Y.  H.  tea,  71  and  ']2  lbs. 
@  40c,  3  sacks  Rio  coffee,  150,  152  and  153  lbs.  @  ^7/4^,  billing  on  account. 

Received  cash  of  James  Lee  for  his  invoice  of  Nov.  4,  less  2j4  per  cent  discount. 

Paid  Grant,  Kennedy  &  Co.  for  their  invoice  of  ist  inst.,  after  deducting  the  discount  they 
offered,  the  net  amount  paid  them  being  $1430.55. 

Receive  an  invoice  of  cheese  from  the  H.  A.  Hudson  Co.,  Falls  City,  amounting  to 
$107.95,  bought  on  account,  with  a  discount  ofTer  of  five  per  cent  if  paid  in  10  days. 

Paid  cash  for  freight  $7.20  and  for  drayage  60  cts.  on  last  invoice. 

Sold  Chas.  Marvin,  city,  [  bbl.  P.  R.  molasses,  48  gals.  @  33c,  2  bbls.  G  sugar,  320 
and  330  lbs.  (6r3  4 ^c,  10  bbls.  XX  flour  @  $5.50,  2  bbls.  cranberries^  $10.50,  5  boxes  cheese, 
60,  62,  63.  65  and  70  lbs.  @  i  ic,  billing  on  account.  Received  cash  of  him  for  his  invoice  of 
4th  inst.,  less  2  per  cent  discount. 

Sent  cash  to  D.  M.  Stevens  &  Co.,  to  pay  their  invoice  credited  3d  inst.,  less  the  discount 
they  offered. 

Sold  E.  M.  Bundy,  Deerfield,  3  sacks  Rio  coffee,  150,  148  and  152  lbs,  @  ^7}4c,  2  chests 
Japan  tea,  64  and  66  lbs.  @  42}4c,  3  bbls.  A  sugar,  300,  305  and  308  lbs,  @  4,^c,  i  bbl.  oat 
meal,  i  50  lbs.  @  314^0,  charging  drayage  25  cts.  Discounted  the  entire  bill  3  per  cent  and 
drew  on  Bundy  at  sight  for  the  proceeds,  leaving  the  draft  at  bank  for  collection. 


DOUBLE  ENTRY  FOR   WHOLESALERS.  103 

Received  cash  of  Smith  &  Lee  to  apply  on  account  ^80. 

liought  Henry  Carter's  stock  of  groceries  in  order  to  save  our  account,  as  he  was  unable 
to  pay  his  bills.  Allowed  him  ;^429.75  for  the  entire  stock,  assuming  to  pay  Kephart  &  Co. 
$127.25,  Hunter  &  Parsons  $'/6.2(^,  and  giving  Carter  cash  for  the  balance  due  after  deducting 
our  account  against  him. 

Sold  Ray  Turner,  Dayton,  2  bbls.  C  sugar,  315  and  319  lbs.  @  4c,  i  chest  \\.  B.  tea,  ^7 
lbs.  @  45c,  I  sack  Java  coffee,  102  lbs.  at  22^c,  i  bbl.  N.  O.  molasses,  47  gals.  @  38c,  charg- 
ing drayage  40  cts,  and  billing  on  account. 

Paid  cash  for  postage  ;j§i.50. 

10 

Received  cash  from  H.  Thompson  ;^ioo  in  payment  of  his  note. 

Sold  Emerson  &  Hatch,  Brownville,  2  gross  matches  @  $2.50,  2  doz.  3  hoop  pails  @ 
$2.25,  I  doz.  zinc  washboards  @  $2.50,  i  bbl.  cranberries  @  ;^io.50,  3  boxes  cheese,  64,  62, 
and  63  lbs.  @  iic,  3  bbls.  G  sugar,  315,  318  and  321  lbs.  @  4^c,  charging  drayage  25  cts. 
Billed  on  account  30  days,  with  a  discount  offer  of  3  per  cent  for  cash  in  10  days. 

Received  a  draft  from  the  Bank  of  Waynesville  for  the  amount  of  the  C.  O.  D.  bill  sent  to 
J.  ¥..  Johnson,  7th  inst.,  less  50  cts.  deducted  by  the  bank  for  collection  charges. 

l-i-cceived  cash  for  the  rent  of  two  offices  in  the  third  floor  of  our  building  ;^2i.50. 

Sold  Bemis  &  Brown,  Stanton,  6  bbls.  XXX  flour  @  $5.85,  3  sacks  rice,  100,  102  and 
104  lbs.  @  ^^/i.c,  2  sacks  Rio  coffee,  15  r  and  153  lbs.  @  I7^c,  i  bbl.  amber  syrup,  45  gals. 
@  42c,  charging  drayage  25  cts.,  and  billing  on  account. 

H.  Sherman  has  paid  his  invoice  of  the  7th  inst.,  less  the  cash  discount  we  offered. 

Paid  A.  C.  F"urlong  &  Co.,  cash  1^146.78,  the  balance  due  on  their  invoice  of  2d  inst.,  after 
deducting  payments  already  made  and  $9.47  discount  for  payment  of  enlirebill  within  10  days. 

Received  cash  of  E.  C.  Martin  to  apply  on  account  $ys. 

Sold  the  stock  of  groceries  purchased  of  Henry  Carter  9th  inst.,  to  O.  Sherman  for  ;^42  5, 
receiving  cash  to  apply  on  same  $125,  balance  on  account. 

Paid  cash  for  painting  the  front  of  our  store  building  $47.50.       [Real  Estate.] 

Discounted  Hunter  &  Parson's  invoice  of  7th  inst.  at  the  rate  they  offered,  sending  cash 
for  the  proceeds. 

Received  an  invoice  of  sugar  and  molasses  from  Kephart  &  Co.,  Philadelphia,  amounting 
to  $275  25,  billed  on  account  30  days,  subject  to  a  discount  of  1  ^  per  cent  for  cash  in  10  days. 

Paid  cash  for  freight  $12.50  and  for  drayage  75  cts.,  on  last  invoice. 

Sold  Smith  &  Lee,  city,  i  chest  E.  B.  tea,  43  lbs.  @  45c,  i  chest  Y.  H.  tea,  68  lbs.  @  40c, 
I  chest  Japan  tea,  63  lbs.  @  42c,  2  cases  ground  coffee,  each  60  lbs.  @  22^c,  i  sack  dried 
peaches,  90  lbs.  @  I2j4c,  billing  on  account.     Received  cash  of  them  to  apply  on  account  $60. 

Paid  cish  for  electric  light  in  the  store  room  $7.50. 

Received  an  invoice  of  wooden  ware  from  D.  M.  Stevens  &  Co.,  Detroit,  amounting  to 
$77.25,  bought  on  account. 

Paid  cash  for  freight  $2.50  and  for  drayage  25  cts.,  on  last  invoice. 

Gave  cash  to  pay  A.  C.  Furlong  &  Co.'s  draft  on  us  for  $75  to  apply  on  account. 

11 

Sold  Reed  &  Young,  city,  2  bbls.  C  sugar,  320  and  324  lbs.  @  4c,  2  bbls.  cranberries  @ 
$10.50,  5  bbls  apples  @  $2  25.  Received  cash  to  apply  on  the  purchase  $25,  balance  on 
account. 

Received  cash  for  rent  of  hall  in  our  building  $25. 

Sold  James  Lee,  Vinton,  i  bbl.  N.  O.  molasses,  45  gals.  @  38c,  i  chest  E.  B.  tea,  47  lbs. 
@  45c,  I  sack  Rio  coffee,  147  lbs.  @  i7}4c,  2  boxes  laundry  soap,  each  60  lbs.  @  3%^c, 
charging  drayage  25  cts.,  and  billing  on  account. 

Paid  cash  lor  clerk  hire  $17.50. 

Discounted  Kephart  &  Co.'s  invoice  received  4th  inst.,  at  the  rate  they  offered,  sending 
cash  for  the  proceeds. 

Sold  to  sundry  city  dealers,  for  cash,  15  bbls.  apples  @  $225,  10  bbls.  cranberries  @ 
$10.25. 


104  ESSENTIALS  OF  BOOKKEEPING. 

Our  sight  draft  on  E.  M.  Bundy,  left  at  bank  9th  inst.,  has  been  paid  and  we  have  received 
cash  for  the  proceeds  after  a  deduction  of  50  cts.  for  collection  charges. 

By  consent  of  the  firm,  H.  Hudson  has  withdrawn  $\oQ)Q  from  his  invested  capital,  receiv- 
ing cash  for  the  same. 

Sold  Kingman  &  Co.,  Toledo,  10  bbls.  XXX  flour  @  ^5.85,  2  bbls.  oat  meal,  each  i  50  lbs. 
(?/;  3c,  2  boxes  Turkish  prunes,  each  60  lbs.  (^,  y%c,  charging  drayage  25  cts.  Billed  on  ac- 
count subject  to  5  per  cent  discount  for  cash  in  10  days. 

Received  cash  of  Charles  Marvin  to  apply  on  account  $'/0. 

Gave  a  check  to  pay  for  building  a  new  sidewalk  in  front  of  our  store  room  $37.50. 

Received  a  note  at  one  day  from  Smith  &  Lee  for  $102.30  to  balance  their  account.  [En- 
ter on  both  sides  of  the  cash  book.] 

Gave  cash  to  pay  C.  M.  Nelson's  sight  draft  on  us  for  the  balance  of  his  account  $80. 

Sold  H.  Sherman,  Creston,  i  sack  tapioca,  125  lbs.  @  5^c,  i  bbl.  English  currants,  230 
lbs.  (^  4-%c,  I  bbl.  cranberries  @  $10.50,  2  bbls.  C  sugar,  312  and  318  lbs.  (^\  4c,  charging 
drayage  25  cts.,  and  billing  on  account. 

Received  cash  from  Kingman  &  Co.,  for  proceeds  of  their  invoice  of  5th  inst.,  after  deduct- 
ing the  discount  we  offered. 

Paid  cash  for  postage  and  stationary  $3.50. 

Carry  out  the  totals  of  all  special  columns,  post  the  ledger  and  take  a  proof,  recording  the 
same  in  the  trial  balance  book. 

12 

Paid  A.  C.  Furlong  cash  for  invoice  of  7th  inst.  less  a  discount  on  same  of  5  per  cent. 

Received  cash  from  O.  Sherman  to  apply  on  account  $150. 

Sold  E.  C.  Martin,  city,  i  bbl.  P.  R.  molasses,  49)^  gals.  @  33c,  2  sacks  rice,  100  and  102 
lbs.  @  4^c,  1  case  oat  meal,  48  lbs.  (^  3}4c,  i  box  cheese,  60  lbs.  (^  1  ic,  i  box  French 
prunes,  45  lbs.  @  i  2  i^c,  billing  on  account.     Received  cash  from  him  to  apply  on  account,  $40. 

Paid  cash  for  clerk  hire  to  date  $35, 

Sold  to  city  dealers  for  cash,  25  bbls.  apples  (({]  $2.25,  5  bbls.  cranberries  @$io.50,  i  bbl. 
A  sugar,  320  lbs.  @  4}4c,  10  boxes  cheese,  weighing  61  5  lbs.  ^f)  lie. 

Received  cash  from  Kingman  &  Co,  in  payment  of  their  invoice  of  I'lth  inst.,  less  the  dis- 
count we  offered. 

Sent  our  check  to  Hunter  &  Parsons  to  balance  their  account. 

Paid  cash  for  repairs  and  improvements  on  our  store  building  $125. 

Sold  E.  M.  Bundy,  Deerfield,  3  bbls.  A  sugar,  308,  312  and  310  lbs.  @  4}4c,  i  sack  Rio 
coffee,  150  lbs.  @  I7^c,  2  bbls.  XXX  flour  @  $5.85,  i  bbl.  English  currants,  220  lbs.  @ 
4^c,  I  bbl.  cranberries  (^;  $10.50,  i  doz.  No.  2  wash  tubs  @  $8.25,  i  doz.  carpet  brooms  ^) 
$2.25,  charging  drayage  25c.  Discounted  the  entire  bill  3  per  cent,  receiving  cash  to  apply  on 
the  proceeds  $25,  and  drawing  on  Bundy  at  sight  for  the  balance  payable  to  our  bank,  with 
whom  we  left  the  draft  for  collection. 

Received  cash  for  hall  rent  in  our  building  $17.50. 

Discounted  the  H.  A.  Hudson  Go's,  invoice,  received  the  9th  inst.,  sending  them  our  check 
for  the  proceeds,  after  deducting  the  discount  they  offered. 

Bemis  &  Brown  have  sent  us  cash  to  pay  their  invoice  of  the  loth  inst.,  after  deducting  a 
cash  discount  of  3  per  cent. 

Paid  cash  for  fuel  for  heating  office  $3.50. 

We  have  allowed  H.  Thompson  a  discount  of  3  per  cent  on  the  balance  of  his  account, 
and  he  has  paid  us  cash  in  full  for  the  balance  due. 

14 

Received  cash  from  Emerson  &  Hatch  in  payment  of  their  invoice  of  loth  inst.,  less  the 
cash  discount  they  were  authorized  to  deduct. 

Paid  cash  for  drayage  to  date  on  merchandise  sales  $2. 

Gave  a  check  to  pay  Kephart  &  Co.'s  sight  draft  on  us  for  $127.25,  to  apply  on  account. 

Received  cash  of  O.  Sherman  in  full  of  account. 

Paid  cash  for  50  bbls.  apples  @  $1.75. 


DOUBLE  ENTRY  FOR   WHOLESALERS.  105 

Sold  Reed  &  Young,  city.  1  chest  Y.  H.  tea,  71  lbs.  @  40c,  i  sack  Rio  coffee,  149  lbs  @ 
17c.  Received  cash  from  them  to  balance  their  account  including  to-day's  sale,  the  whole 
amount  due  us  being  discounted   2  per  cent. 

Paid  cash  for  postage  and  stationery  $},.'J^. 

Received  cash  from  Smith  &  Lee  ;$  102.30  in  payment  of  their  note. 

Received  cash  from  James  Lee  to  pay  his  invoice  of  i  i  inst.,  less  a  cash  discount  of  2^ 
per  cent. 

Our  sight  draft  on  E.  M.  Bundy  has  been  paid  and  the  bank  has  given  us  cash  for  the 
proceeds,  after  deducting  25  cts.  for  collection  charges. 

Sold  to  city  dealers,  for  cash,  20  bbls.  XXX  flour  @  ,^5.85,  10  bbls.  XX  flour  %  ;^5.50,  10 
bbls.  apples  @  ;^2.20,  5  bbls.  cranberries  @  ;^io.25. 

Drew  at  sight  on  E.  C.  Martin,  in  favor  of  Grant,  Kennedy  &  Co.  for  the  balance  due 
them,  and  sent  them  the  draft  to  balance  their  account. 

Sent  cash  to  D.  M.  Stevens  &  Co.  to  pay  their  invoice  of  loth  inst.  less  a  cash  discount 
of  5  per  cenr. 

Received  cash  of  Ray  Turner  to  pay  his  invoice  of  9th  inst.,  less  a  cash  discount  of  5  per 
cent. 

Drew  on  H.  Sherman  at  10  days'  sight  for  the  balance  of  his  account,  in  favor  of  our  bank, 
who  have  paid  us  cash  for  the  draft,  less  a  discount  of  ^i. 

Received  cash  of  E.  C.  Martin  on  account  1^12.93. 

Received  cash  of  C.  Marvin  for  balance  of  his  account  less  a  discount  of  2^  per  cent. 

Paid  cash  for  proceeds  of  Kephart  &  Co's  invoice  of  loth  inst.,  after  deducting  the  dis- 
count they  offered. 

15 

The  student  and  C.  A.  Carpenter  have  each  drawn  $25  for  salary  due  them  to  i  5th  inst. 

Paid  cash  for  gas  bill  to  date  $S-3^. 

The  firm  of  C.  A.  Carpenter  &  Co.  have  decided  to  dissolve  partnership,  the  student  and 
H.  Hudson  withdrawing,  and  Carpenter  continuing  the  business. 

C.  A.  Carpenter  takes  the  stock  of  merchandise  on  hand  inventoried  at  $77S9-7^,  allowing 
for  the  prepaid  expenses  ;$7 5,  and  tor  the  good  will  of  the  business  ^600,  the  same  being  charged 
to  his  account. 

Henry  Hudson  takes  back  the  real  estate,  inventoried  at  56200,  the  same  being  charged  to 
his  account. 

All  ledger  accounts  should  now  be  closed  except  the  partners'  accounts,  the  net  gain  being 
divided  according  to  contract  and  credited  to  the  partners, 

C.  A.  Carpenter  invests  enough  cash  to  balance  his  account  after  allowing  for  his  share  of 
the  net  gain. 

The  student  and  Henry  Hudson  each  draw  out  cash  to  balance  their  accounts  after  allow- 
ing for  their  share  of  the  net  gain. 

The  partners'  accounts  should  now  be  closed,  no  balance  account  being  required. 


io6  ESSENTIALS  OF  BOOKKEEPING. 


SELT  SEVEN. 


LUMBE^R  BUSINESS. 


SPECIAL  COLUMN  BOOKS. 

We  have  planned  the  following  set  to  illustrate  a  method  of  recording  purchases  and  sales, 
so  that  the  books  may  give  us  an  approximate  inventory  at  any  time;  also  to  illustrate  the  use 
of  a  journal  with  special  columns  for  cash  and  merchandise  entries ;  and  along  with  these  v^arie- 
ties  of  bookkeeping,  to  afford  the  student  practice  in  rapid  and  easy  computation  of  lumber. 

The  style  of  recording  sales  and  purchases  in  special  columns  is  adapted  to  any  kind  of 
business  in  which  but  a  few  varieties  of  merchandise  are  bought  and  sold  ;  as  buying  and  ship- 
ping grain  or  live  stock,  selling  wood  and  coal,  and  any  other  line  of  business  in  which  there 
may  be  special  columns  conviently  arranged  on  a  page,  to  represent  each  variety  of  merchan- 
dise handled. 

The  left  page  is  ruled  like  a  day  book  or  journal,  and  the  entire  transaction  is  there  re- 
corded either  as  a  day  book  entry  or  a  historical  journal  entry,  after  which  the  quantity  of  each 
article  is  extended  on  the  right  page  to  its  special  column.  In  this  way  the  special  columns 
will  show  the  quantities  sold  of  each  variety  of  merchandise  represented. 

If  an  invoice  or  purchase  book  is  kept  with  corresponding  columns,  the  difference  between 
the  total  purchases  and  sales  will  give  the  quantity  on  hand  at  any  time. 

In  the  lumber  business,  the  leading  varieties  of  lumber  can  be  represented  in  special  col- 
umns, and  other  varieties  that  are  sold  less  frequently,  or  only  in  small  quantities,  need  not  be 
extended  to  special  columns.  By  using  such  a  book,  the  lumber  merchant  can  readily  estimate 
the  quantity  on  hand  of  each  staple  variety,  and  in  case  an  estimate  is  wanted  of  the  value  of 
the  lumber  on  hand,  he  can  approximate  very  nearly  to  the  correct  amount,  by  the  use  of  these 
special  columns. 

The  form  of  journal  represented  in  this  set,  called  the  Six  Column  Journal,  is  one  that  is 
used  by  many  accountants.  It  is  especially  adapted  to  varieties  of  business  where  two  ledger 
titles  are  frequently  repeated.  In  a  business  where  cash  and  merchandise  enter  into  a  large 
proportion  of  the  transactions,  by  using  special  columns  for  the  debits  and  credits  of  each,  we 
can  avoid  long  ledger  accounts  with  these  two  titles,  and  get  the  same  results  by  posting  the 
totals  of  cash  and  merchandise  columns  once  a  month  ;  or  these  can  be  carried  to  the  proof 
direct  from  the  journal  columns,  as  cash  is  from  the  cash  book.  If  cash  columns  are  kept  in 
the  journal,  the  cash  book  will  not  be  used. 

The  columns  should  be  added  at  the  foot  of  each  page,  and  the  amounts  carried  forward. 
The  footings  of  the  three  debit  columns  (Cash,  Merchandise,  and  general  Debits  on  the  left  of 
the  journal  page)  should  just  equal  the  footings  of  the  three  credit  columns  (the  same  titles  on 
the  right  of  the  journal  page.) 

In  posting  from  the  special  column  journal  to  the  ledger,  the  cash  and  merchandise  entries 
are  omitted,  and  only  the  entries  found  in  the  general  columns  are  carried  to  the  ledger.  Two 
folio  columns  are  given,  the  one  on  the  left  being  for  debits,  and  the  one  on  the  right  for  credits. 

The  totals  of  Cash  and  Merchandise  columns  should  be  posted  from  the  last  page  of  the 
journal  to  the  ledger,  writing  in  the  explanation  column  of  the  ledger,  "Journal  Debits,"  "Journal 
Credits,"  and  using  the  date  of  the  last  journal  entry,  usually  the  last  of  each  month. 

The  number  of  special  columns  may  be  increased  by  having  larger  pages  ruled  especially 
for  them.  The  same  rules  would  apply  to  a  journal  having  any  number  of  columns,  as  apply 
to  the  six  columns  illustrated  in  the  present  example. 


SPECIAL  COLUMN  BOOKS.  107 

In  estimating  lumber,  the  unit  of  measure  is  a  board  one  inch  thick,  on;  foot  wide  and  one 
foot  long,  making  one  foot  of  lumber;  in  other  words,  a  foot  of  lumber  is  a  square  foot  with  a 
thickness  of  one  inch,  and  in  computing  all  dimensions  of  boards,  joists,  scantling,  and  timbers, 
we  virtually  reduce  them  to  inch  boards  and  then  find  the  number  of  square  feet  in  each  board. 

If  the  width  of  lumber  were  given  in  feet  or  fractions  of  a  foot,  we  would  not  require  a 
special  rule;  but  the  width  is  always  given  in  inches,  which  are  twelfths  of  a  foot.  Thus,  an 
inch  board  10  inches  wide  and  a  foot  long  would  contain  |'2'xi=l^  ft.  board  measure,  and  if  it 
were  12  ft.  long,  it  would  contain  J§xi2=io  ft.  board  measure. 

If  the  board  were  i^  inches  thick,  there  would  be  one-half  more  lumber,  or  15  ft.;  or  if 
2  inches  thick,  there  would  be  20  ft.  Lumber  sawed  less  than  one  inch  thick  is  counted  the 
the  same  as  inch  lumber  in  computing  the  number  of  feet,  board  measure. 

RULE,S  FOR  ESTIMATING  LUMBER. 

1.  When  the  thickness  is  one  inch  or  less. 

Multiply  the  zuidth  in  inches  by  the  Icng'th  in  feet,  and  divide  the  -product  by  tiuelve. 
Or,  multiply  the  zuidth,  in  feet  or  tzuelfths  of  a  foot,  by  the  length  infect. 

2.  When  the  thickness  is  more  than  one  inch. 

Multiply  the  thickness  in  inches  by  the  ividth  and  length,  the  latter  tzco  being  ex- 
pressed in  feet  or  tzuelfths  of  a  foot. 

The  result  in  either  case  will  be  the  number  of  feet  of  lumber. 

The  process  of  cancellation  can  be  used  to  good  advantage  in  making  lumber  calculations, 

EXAMPLES. 

I.      How  much  lumber  in  a  board  18  ft.  long,  8  in.  wide,  and  i  in.  thick?        (ix8 — 18.) 


/ 


How  much  lumber  in  a  plank  24  ft.  long,  8  in.  wide,  and  2  in.  thick?     (2x8 — 24.) 


f  3L- 


V-nSr- 


3.      How  much  lumber  in  6  pieces  2x4.  in.  and  16  ft.  long?     (6  pes.  2x4 — 16 


-^ 


Lumber  is  usually  estimated  and  quoted  by  the  thousand  feet,  board  measure.  Shingles 
by  the  thousand,  the  standard  shingle  being  4  inches  wide;  thus  a  shingle  that  is  8  inches  wide 
will  be  counted  as  two  shingles  in  buying  or  selling.  L^th  are  estimated  by  the  thousand.  The 
denomination  thousand  is  represented  by  the  Roman  character  M. 

Since  the  different  varieties  of  lumber  are  quoted  by  the  thousand  feet,  and  the  quantity 
sold  may  be  less  than  a  thousand  feet,  we  would  suggest  the  following 

RULE  FOR  ESTIMATING  VALUE.  OF  LUMBER. 

Multiply  the  price  per  thousand  by  the  number  of  feet  expressed  deciuially  as  tlious- 
andths. 

The  product  properly  pointed  off  wjH  give  the  value. 


io8  ESSENTIALS  OF  BOOKKEEPING. 

EXAMPLES. 

1.  What  is  the  value  of  753  ft.  Finishing  lumber  (gi  $17.^0  ? 

2.  What  is  the  value  of  2,1  24  ft.  Flooring  (a),  $24.. 

Logically,  in  the  second  example,  we  should  multiply  24  by   2,124;   but   for   convenience, 
we  multiply  2,124  by  24,  which  gives  the  same  product  in  the  abstract. 

(I)  .(2) 

37.50  2.i:j4 

753  24 


1 1 250  8496 

18750  4248 

26250 


50.976     Ans.  ;^50.98. 
28.23750     Ans.  1^28.24. 

REMARKS  ON  THE,  ILLUSTRATED  FORMS. 

A  few  entries  are  given  in  the  purchase  and  sales  books,  to  illustrate  the  use  of  the  special 
columns.  If  such  a  system  were  used  in  any  business  adapted  to  it,  the  history  of  each  trans- 
action and  the  results  could  be  entered  on  the  left  page  at  the  time  of  the  transaction,  and  the 
quantities  could  be  extended  to  the  special  columns  at  any  convenient  time  afterward. 

The  journal  given  on  the  left  folio  represents  the  first  page  of  the  journal  with  the  footings 
of  each  column  at  the  bottom  in  small  figures,  and  as  a  test  of  their  accuracy,  the  three  amounts 
in  the  debit  columns  are  added  horizontally  to  the  right  and  their  sum  written  in  small  figures 
in  the  wide  center  column,  and  the  three  amounts  of  the  credit  columns  are  added  horizontally 
to  the  left  and  their  sum  also  written  in  the  wide  center  column.  If  these  two  sums  are  equal, 
the  journal  is  in  balance  and  the  footings  are  correct,  and  the  same  should  be  forwarded  to 
their  respective  columns  on  the  next  page  of  the  journal. 

The  journal  given  on  the  right  folio  represents  the  entries  continued,  with  the  footings  for- 
warded from  the  preceding  page.  At  the  bottom  of  the  right  page  the  totals  of  Cash  and  Mer- 
chandise are  carried  to  the  general  column,  to  illustrate  the  method  of  closing  the  journal  ready 
for  posting.  The  student  will  continue  forwarding  the  footings  of  each  column  from  page  to 
page,  until  he  has  entered  all  the  transactions  in  the  set,  after  which  he  will  close  the  journal 
according  to  the  model  given.  If  the  final  footings  of  Cash  debits  and  credits  are  the  same,  it 
would  hardly  seem  necessary  to  post  this  account  in  the  ledger.  Usually,  these  columns  do 
not  agree,  and,  in  such  case.  Cash  requires  a  ledger  title  for  the  monthly  totals. 

Titles  that  do  not  require  posting  should  be  checked  in  the  folio  columns. 

After  the  student  has  entered  a  full  page  in  his  journal,  he  should  review  the  amounts 
carefully,  to  see  if  all  are  extended  to  their  proper  columns,  before  the  columns  are  added  and 
their  amounts  forwarded.  If  he  fails  to  extend  any  of  the  amounts  to  their  proper  columns,  his 
ledger  will  be  out  of  balance  after  posting. 

The  sales  and  purchases  are  itemized  in  their  special  books  and  are  journalized  together 
at  the  close  of  the  day.  Other  transactions  will  be  journalized  at  once  in  the  order  of  their  oc- 
currence, with  proper  explanatory  entries. 

We  present  in  this  set  a  form  of  the  note  book  slightly  different  from  that  given  in  Set 
Three.  The  present  form  is  especially  adapted  to  varieties  of  Double  Entry  in  which  the  Bills 
Receivable  and  PayabiC  accounts  are  kept  in  the  note  book  exclusively,  no  accounts  with  these 
titles  being  kept  in  the  ledger. 

We  should  always  number  our  notes  payable  in  the  order  in  which  we  issue  them,  and 
notes  receivable  should  also  be  numbered  by  us  in  the  order  in  which  they  come  into  our  pos- 
session. A  note  receivable  will  probably  have  recorded  on  it  the  maker's  number  as  he  issues 
it,  and  our  receiving  number  can  be  written  in  red  ink  on  the  margin  of  the  paper,  without  in 
any  way  interfering  with  the  body  of  the  note. 


SPECIAL  COLUMN  BOOKS.  109 

The  double  titles  in  the  second  and  third  columns  make  them  adapted  to  either  drafts  or 
notes,  Drawer  and  Drawee  applying  to  a  draft,  and  Endorser  and  Maker  to  a  note. 

The  column  "When  Due"  may  be  divided  into  thirteen  spaces,  the  same  as  represented  in  the 
bill  book  on  page  37;  or  it  may  be  divided  into  three  spaces,  for  recording  the  year,  month,  and 
day  of  maturity,  as  represented  in  the  bill  book  on  page  113.  In  estimating  maturities  in  this 
set,  the  student  will  count  days  of  grace. 

The  remaining  space,  after  the  interest  column,  is  so  ruled  that  the  book  may  be  used  for 
original  entries,  if  so  desired,  and  posting  made  direct  from  its  pages  to  the  ledger.  The  col- 
umn marked  "Debit  Item"  in  Bills  Payable  gives  the  title  which  is  made  debtor  by  our  note 
issued,  and  the  one  marked  "Credit  Item"  gives  the  title  or  titles  that  are  made  creditor  by  the 
payment  of  our  notes.  The  column  marked  "Credit  Item"  in  Bills  Receivable  gives  the  title 
that  is  made  creditor  when  we  receive  a  note,  and  the  one  marked  "Debit  Item"  gives  the  title 
that  is  made  debtor  when  we  dispose  of  such  a  note. 

If  we  do  not  post  debits  and  credits  from  the  note  book,  we  can  make  a  check  mark  in  the 
folio  column  as  soon  as  we  enter  each  note,  which  indicates  that  the  entry  is  not  to  be  posted. 

In  working  Set  Seven,  the  student  may  copy  the  opening  entries  in  his  bill  book  fiom  the 
bill  book  represented  in  the  text,  as  the  description  of  the  notes  invested  is  not  given  in  the 
transactions. 

As  all  transactions  are  journalized  in  this  set,  the  student  will  post  no  debits  and  credits 
from  the  note  book  to  the  ledger.  The  debits  and  credits  of  Bills  Receivable  and  Payable  that 
appear  in  the  journal  should  not  be  posted  to  the  ledger,  as  the  results  of  these  two  accounts 
can  be  carried  from  the  bill  book  to  the  proof  sheet,  and  these  titles  in  the  ledger  w  ould  be 
superfluous. 

The  student  may  substitute  his  own  name  for  A.  Learner,  and  may  keep  t^vo  ledger  ac- 
counts with  himself,  one  for  his  investment  account  and  the  other  for  his  private  account.  Be- 
fore closing  the  ledger,  he  will  balance  his  private  account  and  debit  the  same  in  his  investment 
account. 

TRANSACTIONS. 

FE,B.  1,  I89-- 

A.  Learner  began  business  as  dealer  in  lumber,  with  the  following  resources  and  liabilities 
from  a  former  business: 

Resources — Cash  1^1520,  a  stock  of  groceries  inventoried  at  $21"]. ^o,  four  notes  receivable, 
as  described  in  the  bill  book,  amounting  to  ;^867.75,  balance  due  from  Henry  Trenton,  on  ac- 
count ;^4i.i5,  postage  stamps  and  stationery  for  office  use  $\.2^,  fuel  for  heating  office  ;$ 2.2 5,  a 
farm  of  30  acres  worth  $2750,  4  d.iys'  interest  receivable  on  H.  Seabrook's  note. 

Liabilities — Four  notes  payable,  as  described  in  the  bill  book,  amounting  to  1^1400,  and  7 
days'  interest  on  the  two  notes  in  favor  of  S.  T.  Lacey. 

Bought  of  Quick  &  Sharp,  their  entire  stock  of  lumber,  the  following  being  a  summary  of 
the  inventory. 

10  M  Finishing  Lumber,  20  M  P"looring,  15  M  Siding,  15  M  Ship  Lap,  30  M  Common 
Boards,  60  M  Joists  and  Scantling  (including  sawed  timbers),  95  M  Lath,  120  M  Shingles,  and 
other  sundry  materials,  including,  Doors,  Windows,  Mouldings,  etc.,  the  whole  inventory 
amounting  to  ^3195.25;  for  which  we  gave  them  in  payment  10  acres  of  our  land  valued  at  ^100 
per  acre,  cash  ;^iooo,  and  our  three  notes,  one  at  10  days  for  1^250,  one  at  15  days  for  ;^300, 
and  one  at  20  days  for  $l^o,  payable  at  our  office,  the  balance,  ;^295.25,  being  placed  to  their 
credit  on  account. 

2 

Paid  cash  in  advance  for  i  month's  rent  of  office  and  lumber  yard  1^50. 

Sold  Henry  Trenton,  on  account,  2  M  No.  2  Ship  Lap  @  1^16.50,  10  pes.  6x8-14  (mean- 
tng  6  inches  thick,  8  inches  wide  and  14  feet  long),  10  pes.  6x8-12,  15  pes.  6x8-16,  @  $\(>\  5 
M  Lath  @  ;^3. 

Paid  cash  for  set  of  office  books  ;^  12.75. 

Bought  of  H.  B.  Matter  1 200  split  Posts  @  i  5  cts.  each,  paying  him  cash.  Paid  cash  for 
freight  on  the  Posts  ;^55. 

Paid  cash  for  advertising  ;^7.75. 

[transactions    continued    on    page    112.] 


no 


ESSENTIALS  OF  BOOKKEEPING. 


INVOICE  BOOK. 


189— 

' 

Items 

Amount 

Feb. 

1 
2 

Bot.  of  Quick  &  Sharp,  their  stock  of  Lumber,  invoicing 
Selling  them  in  part  payment  10  acres  land 
Paying  them  in  cash                                      r  ;r. 
Giving  them  our  3  notes  as  per  Bill  Book 
Balance  to  their  credit 

1000 

1000 

900 

295 

25 

3195 
180 

25 

Bot.  of  H.  B.  Matter,  paying  cash,  1200  split  posts,                            15 

SALES  BOOK. 


189- 


Feb. 


^  M 
oS 


H.  Trenton 

2  M  No.  2  Ship  Lap 

10  pieces  6x8—14,  560  feet 

10        "      6x8-12,  480    " 

15  "      6x8-16,960    "    2000  feet 
5  M  Lath 

P.   J.  Franlclin 

18  pieces  6x8—12,  864  feet 

16  "      6x6—16,  768    " 
12        "      4x6—18,  432    " 

40        •'      2x4—12,320    "  2384  feet 
1500  feet  No.  1  Flooring 
1250    "     Sheeting 

4  M  Shingles 

G.  M.  Null,  180  Second  avenue 

5  boards  1^x16-16,  160  feet 
9        "      1x18-16,  216  feet 


Items 


On  account! 

$16.50 :       33 


16.00 

32 

3.00 

15 

Cash 

16.00 

38 

14 

30.00 

13.00' 

3.00 

45 
16 
12 

25 

On  account 
40.00 
45.00 

6  40 

9  72 

Amount 


80 


11139 


1612 


THE  SIX  COLUMN  JOURNAL. 

DAYTON,  EEBRUARY  1,  189.. 


Cash 
Debits 

Mdse. 
Debits 

General 
Debits 

fa 
Q 

LEDGER  TITLES. 
Cash 

Q 

General 
Credits 

Mdse. 
Credits 

Cash 
Credits 

1520 

V 

217 

50 

867 

41 

3 

2750 

75 
15 
50 

37 

V 

Merchandise 

Bills  Receivable 

Henry  Trenton 

Expense 

Real  Estate 

Int.  Receivable 

Bills  Payable 
Int.  Payable 
A.  Learner 

V 

1400 
3999 

90 
37 

3195 

25 

v' 

Invested  in  business 

1000 

Mdse.                                Real  Estate 

Cash 

V 

1000 

Bills  Payable 

• 

900 

Quick  &  Sharp 

295 

25 

Per  Invoice  Book 
2 

Expense                           Cash 

50 

^ 

50 

Rent  of  Office  and  Yard  1  mo. 

12 

75 

Expense                           Cash 
Office  Books. 

^ 

12 

75 

180 

• 

Mdse.                                        Cash 
Per  Invoice  Book,  H.  B.  Matter 

• 

.   . 

180 

55 

V 

Mdse.                                          Cash 
Freight  on  Matter's  Invoice. 

V 

55 

1520 

3647 

75 

3725 

52 

8893.21                                                8893.27 

7595 

52 

2297 

75 

SPECIAL  COLUMN  BOOKS. 


I II 


IN  COLUMNS, 


Finishing 

Flooring 

Siding 

Ship  Lap 

Common 
Boards 

Joists  and 
Timbers 

Lath 

Shingles 

Fence  Posts 

10,000 

20,000 

15,000 

15,000 

30,000 

60,000 

95,000 

120,000 

1,200 

IN  COLUMNS. 


Finishing 

Flooring 

Siding 

Ship  Lap 

Common 
Boards 

Joists  and 
Timbers 

Lath 

Shingles 

2,000 

2,000 

5,000 

1,500 

1,250 

2,384 

4,000 

160 
216 

- 

THE,  SIX  COLUMN  JOURNAL. 

FEBRUARY  2.  189— 


Cash 
Debits 

Mdse. 
Debits 

General 
Debits 

u 

Q 

o 

General 
Credits 

Mdse. 
Credits 

1       Cash 
Credits 

1520 

3647 

75 

3725 
80 

52 

Two  Entries  Omitted 
H.  Trenton                                  Mdse. 

si 

• 
1595 

52 

80 

1297 

75 

111 

39 

16 

12 

V 

Cash                                              Mdse. 
G.  M.  Null                                    Mdse. 

111 
16 

39 
12 

14 

88 

25 

18 

V 

Cash                                               Mdse. 
R.  0.  Graves                                Mdse. 

14 
25 

88 
18 

12 

60 

18 
40 

14 

v' 

Cash                                              Mdse. 

M.  I.  Martin                                 Mdse. 
To-day's  sales  per  Sales  Book. 

V' 

• 

12 
18 

40 

60 
14 

A.  Learner  (Per.)                        Mdse. 
Kept  out  groceries  for  private  use. 

160 

• 

Cash                                               Mdse. 
Bal.  groceries  to  Hartley  &  Brown. 

V 

160 

54 

<J 

Cash                                  Real  Estate 
Rec'd  for  house  rent  3  months. 

54 

31 

1872'87 

3647 

75 

3904 

3647 
1872 

96 

7649 

478 
1297 

52 

31 
75 
58 

478 

1297 

75_ 

1 

75 
87 
58 

Merchandise  Totals 

Cash  Totals 

Journal  Footings 

9425 

9425 

112 


ESSENTIALS  OF  BOOKKEEPING. 


NOTES  AND  BILLS 

No. 

Drawer  or  Endorser 

Drawee  or  Maker 

Maker's  Address 

Where  Payable 

Dale  of  Paper 

1 
2 
3 
4 

H.  Sabin 

H.  Smith 
H.  Seabrook 
G.  Oakes 
R.  Graham 

City 

City 

189.. 

Jan. 

<< 

<  t 

7 
28 
29 
29 

NOTES  AND  BILLS 

No. 

Drawer  or  Endorser 

Whose  Favor 

Payee's  Address 

Where  Payable 

Date  of  Paper 

1 
2 
3 
4 

R,  Turner 

S.  T.  Lacey 

it          <  1 

R.  Graham 

Chicago 
City 

1 1 

Com'l  Bank 

189.. 
Jan. 

t  < 
It 

14 
25 
25 
29 

Bought  of  O.  C.  Jordan  1500  sawed  posts  @  i6  cts.,  delivered ;  paying  him  cash  $90,  and 
giving  him  our  draft  at  three  days'  sight  on  Henry  Trenton  for  the  balance. 

Sold  P.J.  Franklin,  for  cash,  18  pes.  6x8-12,  16  pes.  6x5-r6,  12  pes.  4x6-18,  40  pes. 
2x4-12  @  ;^i6;  1500  ft.  No.  i  Flooring  (a^  $  Jo ;  1250  ft.  Sheeting  @  $13  ;  4  M  Shingles  @  53- 

Sold  the  following  Lumber  to  city  customers : 

G.  M.  Null,    180  Second   Avenue,    on  account,   5    boirds    i.\x  16-16  @   ^40,  9  boards 

IX16-18  @  $\% H.  C.  White,  222  Third  St.,  for  cash,  742  feet  Common  Boards  («)  $1  5. 

I  500  Lath  @  ;^2.50 R.  O.  Graves,  1 1  5  Fourth  Ave.,  on  account,  30  pes.  2x6-16  @  $16, 

4  M  Shingles  @  ^2.87.^,  480  feet  Sheeting  @  ;^I2.50 E.  C.  Butler,  1 12  First  St.,  for  cash, 

1200  Lath  @  1^2.50,  2   Doors,  2"x6"xi-)^,  @  $2  each,  4  windows,  12x14,  8   Lights,  @  1^1.40 

per  window M.  L  Martin,  239  Fifth  Ave.,  on  account,  20  pes.  2x4-12,  30  pes.  2x8-14, 

1 6  pes.  2x6-14,  20  pes.  2x10-12,  @  ;^ 1 3.50. 


Kept  out  %i\o  worth  of  Groceries  for  personal  use,  and  sold  the  ba'ance  of  the  stock  to 
Hartley  &  Brown  for  cash  $\6o. 

Received  cash  for  rent  of  house  belonging  to  our  real  estate,  three  months  in  advance,  $54. 

Discounted  G.  Oakes'  note  for  the  time  it  has  yet  to  run  before  maturity,  at  the  rate  of  8 
per  cent  per  annum,  receiving  cash  for  the  proceeds.     (Estimate  February  as  28  days.) 

Paid  Quick  &  Sharp  cash  in  full  of  their  account,  after  receiving  a  cash  discount  of  4  per 
cent. 

Bought  of  H.  B.   Matter,  on  account,  30  M   No.  2   Fencing  @  $12 Paid  cash  for 

freight  on  the  fencing  $^'j.%o. 

Bought  of  Cyrus  Clark,  Clinton,  50   M  Star  Shingles  @  ;^2.35,  and  an  invoice  of  Doors 

and  Windows  amounting  to  ^275.25,  giving  our  note  at   10  days  for  the  entire  amount 

Paid  cash  for  freight  on  the  Doors  and  Windows  ^11.50.  The  Shingles  came  with  freight 
prepaid. 


SPECIAL  COLUMN  BOOKS. 


113 


RECEIVABLE. 


Dr. 


Cr. 


Time 


20  days 
10      " 
30      " 
60      " 


When  Due 

Int. 

Date 

Rec'd 

Year 

Month 

Day 



189- 

189- 

Jan. 

30 

Jan 

7 

" 

Feb. 

10 

6 

" 

28 

" 

Mar. 

3 

" 

29 

*  * 

Apr. 

2 

" 

29 

Credit  Item 


Merchandise 
Real  Estate 
G.  Oakes 
29;  Bills  Pay. 


Fol 


1140 
550 
106  35 
200! 

867 1 75 


Date  of 
Payt. 


Debit  Item 


Fol 


PA  YAHLE. 


Ct 

'. 

Dr. 

When  Due 

Int. 

Date 
Record-          Debit  Item 

Fol 

Amt. 

Date  of 
Payt. 

Credit  Item 

Fol 

Am't. 

Year 

Moiith 

Day 

ed 

30  days 
40      " 
65      " 
60      " 

189- 

Feb. 
Mar. 
Apr. 

16 
9 
3 
2 

6 

6 

189- 
Jan 

14  Merchandise 
25;  Real  Estate 
25      " 
29  Bills  Rec. 

v' 

425 

275 
500 
200 
1400 

Received  cash  of  G.  M.  Null  on  account  ;^io. 

Paid  cash  for  labor  in  lumber  yard  ;^i.50. 

Our  note  favor  Ray  Turner  is  not  due  until  the  i6th  inst.,  but  he  has  proposed  to  allow  us 
a  discount  of  5  per  cent  on  whatever  amount  we  can  pay  to-day.  We  have  accordingly  made 
a  payment  of  cash,  ^225  less  the  discount  proposed,  having  the  same  indorsed  on  the  note. 

Sold  H.  Orton,  Belle  Plaine,  on  account,  car  No.  9763,  C.  &  N.  W.  R.  R.,  4  M  No.  i 
fencing  @  ;^i6;  100  pes.  2x6 — 16,  50  pes.  2.k8 — 16  @;^iS-50,  2  M  3  inch  Pickets  @  ;^  13.50. 

Sold  C.  Emerson,  Vinton,  on  account,  car  No.  1695,  B.  C.  R.  R.,  20  pes.  2x6 — 12,  10 pes, 
4x4 — 14,  10  pes.  4x4 — 12,  30  pes.  2x4 — 16,  20  pes.  2x8 — -14,  @  |i5;4M  Shingles  @  ^3.25,  500 
Split  Posts  @  22  cts.  each.  4  M  Lath  @  ;^3;  4  Doors,  2''x6''xi^  @  $2\  6  Windows,  12x14, 
8  Light.'',  @  i^i-SO  per  Window;  2  M  Clear  Siding  @  ;^22. 

Sold  the  following  lumber  to  city  customers:     L  E.  Johnson,  415    Ninth    Ave.,  for  cash, 

12  boards  i  ^xi4 — 12,  6  boards  1^x16 — 14  @  ;^38.50 H.  C.  White,  222  Third  St.,  on 

account,  100  Sawed    Posts  @  25  cts.  each,  2   M   Fencing   @   ;$I3.50 R.  O.   Graves,    115 

Fourth  Ave.,  cash  $1$,  balance  on  account,  9  pes.  8x8 — 14,  6  pes.  4x6 — 12,  30  pes.  2x4 — 14, 
21  pes.  2x8 — 14  @  $\S-7S- 

Sold  5  acres  of  our  real  estate  to  John  Sherman,  for  cash.  @  ^125  per  acre Prepaid 

our  first  note  favor  Quick  &  Sharp,  receiving  a  discount  from  the  face  of  t!ie  note,  at  the  rate  of 
12  per  cent  per  annum  until  maturity.     [Maturity  should  include  days  of  grace.] 

Paid  cash  for  advertising  our  real  estate  for  sale  $6. 

Our  cash  on  hand  and  in  bank  this  evening  amounts  to  $424.84. 


Sold  B.  O.  Norton,  Nevada,  car  No.  2929,  C.  &  N.  W.  R.  R.,  9  pes.  8x10—22,  6  pes. 
8x10 — 24,  8  pes.  6x6 — 24,  50  pes.  2x6 — 20,  90  pes.  2x6 — 22,  100  pes.  2x6 — 24,  25  pes.  2x12 
— 22  @  $18.50,  receiving  cash  $75,  and  Orton's  sight  draft  on  H.  B.  Matter  for  the  balance. 


114  ESSENTIALS  OF  BOOKKEEPING. 

Sold  C.  E.  Thomas,  Ely,  car  No.  3734,  B.  C.  Ry.,  125  pes.  2x12 — 20,  35  pes.  2x6 — 22,  40 
pes.  2x8 — 18,  50  pes.  2x12 — 16,  40  pes.  2x6 — 18  @  $18;  reeeiving  cash  $<^o,  and  Thomas's 
due-bill  payable  on  demand  for  the  balance. 

Bought  of  H.  B.  Matter,  Fulton,  invoice  of  joists,  scantling,  and  timbers,  95  M  (p).  $\Q)\ 
paying  him  cash  ;^400,  and  giving  him  our  note  at  20  days  with  interest  at  6  per  cent  lor  $300, 
and  placing  balance  to  his  credit  on  account. 

Discounted  our  note  at  15  days  in  favor  of  the  Commercial  Bank,  and  endorsed  by  R.  O. 
Graves,  receiving  cash  for  the  proceeds  after  deducting  18  days'  interest  on  the  face,  $350,  at 
8  per  cent. 

Paid  cash  for  freight  on  the  last  invoice  ^3  12.50. 

Received  cash  of  C.  Emerson  on  account  $\  \  5.20. 

Paid  yard  men  wages  to  date  1^27.50. 

Paid  cash  for  insuring  lumber  in  yard  for  $2,Q>oo  @  I  ^  per  cent.     [Mdse.] 

Paid  cash  for  postage  and  stationery  $2.75. 

Received  cash  of  H.  C.  White  on  account  ;$32. 

Received  cash  of  R.  O.  Graves  on  account  1^30. 

Sold  A.  R.  French,  Fairfax,  car  No.  31 13,  C.  &  N.  W.  Ry.,  10  pes.  6x6— 20,60  pes.  2x12-- 
20,  60  pes.  2x6 — 20,  50  pes.  2x4 — 18  @  $[7.50  ;  receiving  French's  sight  draft  on  H.  B.  Mat- 
ter for  the  amount  of  the  sale. 

Presented  Norton's  and  French's  sight  drafts  and  Thomas's  due-bill  to  H.  B.  Matter,  who 
received  the  drafts  at  their  face  value,  and  the  due-bill  at  a  discount  of  2  per  cent,  giving  us 
credit  on  account  for  the  entire  amount  allowed. 

A.  Learner  has  deeded  5  acres  of  land  with  the  dwelling  house  rented  on  the  3d  inst.,  to 
his  wi  e  as  a  homestead,  withdrawing  its  value,  estimated  at  $1200,  from  his  capital. 

The  student  may  take  a  proof  of  his  ledger  before  advancing  further,  carrying  the  totals  of 
Cash  and  Merchandise  from  the  journal  columns  and  the  debits  and  credits  of  Bills  Receivable 
and  Payable  from  the  bill  book  to  the  proof,  without  posting  them  to  the  ledger.  This  proof 
may  be  made  out  on  loose  paper  without  being  entered  in  the  books,  as  it  is  merely  a  test 
exercise. 

Bought  of  the  Central  Lumber  Co.,  Burlington,  invoice  of  lumber  summarized  as  follows: 
10  M  Finishing,  20  M  Flooring,  10  M  Siding,  amounting  to  $950,  freight  prepaid,  for  which 
we  have  given  our  note  at  30  days. 

Prepaid  our  note  given  to  Cyrus  Clark,  on  the  3d  inst.,  receiving  a  discount  at  the  rate  of 
10  per  cent  per  annum  for  the  time  unexpired,  paying  the  proceeds  in  cash. 

Paid  taxes  on  real  estate  $100. 

Sold  B.  O.  Norton.  Nevada,  car  No.  4646,  C.  &  N.  W.  Ry.,  200  boards  1 1^x12 — 16  @  $30, 
60  pes.  2x4^ — 14  @  ^16,  100  pes.  4x4—18  %$\6\  car  No.  4141,  C.  &  N.  W.  Ry.,  3  M  3  inch 
Pickets  @  ;^I3.50.  90  pes.  2x8 — 16. («^  $16,  12  Doors  2''x6*xl^  @  ^2.05  each,  24  Windows 
24x32,  2  lights,  @  $2.25  per  Window.  Discounted  the  entire  bill  5  per  cent  and  received 
cash  for  the  proceeds. 

Received  cash  of  H.  Seabrook  in  full  for  his  note  given  us  Jan.  28,  with  interest  from  that 
date  to  the  present  at  6  per  cent  per  annum. 

Prepaid  the  balance  due  on  our  note  favor  Ray  Turner,  receiving  a  discount  for  the  num- 
ber of  days  before  maturity  at  10  per  cent  per  annum,  and  paying  cash  for  the  proceeds. 

Sold  the  following  lumber  to  city  customers:  G.  M.  Null,  180  Second  Ave.,  on  account, 
2,400  ft.   Flooring  @  ;^26.  50  Fence  Posts,  sawed,  @  25  cts.  each,  40  pes.  2x6 — 16  @  $\6, 

1,500  3  inch  Pickets  @  ;?I3.75 M.   L   Martin,   239  Fifth  Ave.,  cash  ^12.50,  balance  on 

account,  750  ft.  Clear  Siding  @  $2T ,  500  ft.  Flooring  @  ;^26,   2   Windows,   12x28,  4  lights,  @ 

l?i-75  pe*"  Window H.  C.  White,  222  Third  St.,  on  account,  6  pes.  6x8 — 16,  4  pes.  4x4 — 

18,  32  pes.  2x4 — 18   @  $16.50;  900  ft.  Ship  Lap-®  ;^  17.50. 

Received  notice  of  the  protest  of  a  note  for  ^2,000,  signed  by  our  neighbor,  Henry  Moore, 
and  which  we  had  endorsed  as  a  matter  of  accommodation.  The  note,  interest,  and  protest 
charges  amount  to  $2,125.50.     [No  Pantry.] 


SPECIAL  COLUMN  BOOKS.  115 

We  have  borrowed  ^$2,000  of  the  Commercial  Bank  on  our  note  at  30  days  indorsed  by 
H.  B.  Matter,  deducting  interest  at  8  per  cent  paid  in  advance  for  33  days. 

We  have  give  H.  B.  Matter  a  chattel  mortgage  on  our  stock  of  lumber  for  ^2,000,  to 
secure  him  in  indorsing  the  above  note  for  us,  the  same  to  be  void  when  we  pay  the  note.  [No 
entry] 

Paid  the  protested  note  and  charges  jn  full,  ;^2,i2  5.50,  which  we  now  hold  as  a  claim 
against  Henry  Moore.     [Open  an  account  with  protested  paper.] 

Received  cash  of  H.  Orton  on  account  ;$ioo. 

Paid  H.  B.  Matter's  demand  draft  on  us  for  ;S200. 

Drew  out  cash  for  personal  use  $1'] .'^o. 

Sold  Henry  Trenton,  on  account,  10  M  Shingles  @  %i,  1,250  ft.  Sheeting  @  ;^I4.50,  60 
pes.  2x4-12  @  ^15. 

Paid  H.  B.  Matter  cash  on  account  ;^  156.84. 

Sold  five  acres  of  our  farm  to  S.  T.  Lacey  for  $TOO,  receiving  in  payment  the  two  unpaid 
notes  given  him  Jan.  25,  with  interest  since  that  time  at  6  per  cent,  paying  him  cash  for  the 
excess. 

R.  Graham  has  returned  the  note  given  him  Jan.  29,  and  we  have  given  him  his  note  re- 
ceived in  exchange  for  the  former,  each  being  for  J&200. 

H.  Smith  has  paid  us  cash  for  his  note  dated  Jan.  7. 

Sold  C.  Emerson,  Vinton,  on  account,  24  boards  1x18-18,  36  boards  1x14-16,  20  boards 
1 34^x12-14  @  ;^35  ;  20  M  Shingles  @  ^3.12^  ;  7  M  Lath  @  ^3.1  5  ;  9  Doors  2''x6''xi^,  second 
quality,    @    ^1.75    each;  12  Windows,  I2XE4,  8  lights,  @  ;^i.48per  Window. 

Sold  H.  Orton,  Belle  Plaine,  cash  $^0,  balance  on  account,  2  M  Flooring  @;^22.50,  1,500 
ft.  Siding  @  ;^2i.75,  1,250  feet  F"inishing  Lumber  @  ;^35;  18  pes.  6x8-20,  6  pes.  8x8--i6,  21 
pes.  2x8--i6  @  ;^I7.25. 

Sold  Quick  &  Sharp,  on  account,  500  Split  Posts  @  22^^  cts,,  20  M  Fencing  @  ;^I4.50. 

Received  cash  of  H.  Trenton  in  full  of  account. 

Sold  H.  B.  Matter  the  balance  of  our  real  estate,  5  acres  of  land,  for  ;^62  5,  paying  the 
note  given  him  on  the  4th  inst.,  with  interest  since  that  date  at  6  per  cent,  and  receiving  cash 
for  the  balance  of  the  consideration. 

A  fire  broke  out  in  the  lumber  yard  last  night,  destroying  all  our  lumber,  and  also  destroy- 
ing a  part  of  the  posts  and  fencing  which  we  had  billed  to  Quick  &  Sharp  yesterday,  but  had 
not  yet  delivered. 

Notified  the  Insurance  Co.  of  the  loss,  and  also  of  the  chattel  mortgage  in  favor  of  H.  B. 
Matter,  requesting  them  to  make  the  loss  payable  to  him. 

We  find  that  300  Posts  and  i  5  M  Fencing  had  been  delivered  to  Quick  &  Sharp  yester- 
day, the  balance  is  our  loss,  and  hence  must  be  credited  to  their  account. 

The  Insurance  Co.  required  an  approximate  inventory  of  the  quantity  of  Lumber  on  hand, 
as  shown  by  our  purchase  and  sales  books,  which  proving  satisfactory,  they  have  paid  their 
policy  in  full  to  H.  B.  Matter,  who  has  paid  the  same  to  the  Commercial  Bank  and  taken  up 
the  note  for  ;^2,ooo  which  we  discounted  there  on  the  5th  inst. 

We  have  collected  cash  in  full  of  account  of  G.  M.  Null,  R.  O,  Graves,  M.  I.  Martin,  and 
H.  C.  White. 

We  have  settled  with  H.  Orton,  discounting  $5.11  from  his  account  and  collecting  cash 
for  the  balance,  and  also  with  C.  Emerson,  discounting  ;^6. 15  from  his  account  and  collecting 
cash  for  the  balance. 

Paid  cash  to  the  yard  men  for  wages  to  date  $40.93. 


1 1 6  ESSENTIALS  OF  BO OKKEEPING. 


Have  disposed  of  the  entire  remnants  of  lumber  that  were  saved  from  the  fire,  to  Quick  & 
Sharp  for  ^165.25,  which  they  have  indorsed  as  paid  on  the  first  note  due  them.  They  have 
also  settled  their  account  by  indorsing  the  amount  of  same  as  paid  on  the  second  note  due 
them. 

The  protested  note  of  Henry  Moore  being  estimated  worthless,  should  now  be  cariied  to 
Loss  and  Gain. 

Our  creditors  have  all  agreed  to  accept  the  cash  we  now  have,  as  full  payment  of  their 
claims,  the  same  to  be  distributed  proportionately  among  them,  and  we  have  made  payments 
accordingly. 

The  student  may  now  complete  the  posting  and  close  the  ledgtr. 


B  U SI  NESS  FORMS .  117 


Business  Forms. 


We  shall  group  the  various  forms  together  in  this  chapter  for  convenient  reference  at  any 
time,  illustrating  the  forms  as  partly  printed  and  partly  written,  as  they  usually  appear  in  busi- 
ness, the  blank  forms  being  printed  ready  for  use,  and  the  address,  date,  time,  amount,  and 
names  of  persons  being  written  in  as  the  blanks  are  used. 

PROMISSORY   NOTES. 

A  promissory  note  is  a  written  promise  to  pay  a  certain  sum  of  money  at  a  specified  time. 
The  person  who  signs  the  note  and  thereby  makes  the  promise  is  called  the  maker ;  the  person 
to  whom  it  is  made  payable  is  called  \}:\q  payee;  if  the  payee  transfers  the  ownership  to  another 
by  writing  his  name  on  the  back  of  the  note,  he  is  called  an  indorser,  and  the  writing  is  called 
an  indorsement ;  and  the  person  to  whom  he  makes  the  indorsement  is  called  the  indorsee.  One 
who  signs  a  note  with  the  maker,  to  give  it  additional  credit,  is  called  a  surety. 

A  note  made  payable  only  to  a  specified  person,  is  said  to  be  non-negotiable.  A  note  made 
payable  to  a  certain  person  or  order,  or  bearer,  is  called  negotiable;  being  negotiable  by  in- 
dorsement, if  payable  to  order,  and  negotiable  by  delivery,  if  payable  to  bearer. 

FORMS. 
I 

{Negotiable  by  Indorsement — Individual^ 

%  ^^1.'^^....  Wi^fi^,  Jf^a<p,  ^f^l,  _//    ]gG) 


^:^^^^:f,^'^ft     ^f^e^  dat^      ^_      ppoiT)ise  to  pay 
to  tbf  cpdep  of     ^tjmf'^  ^ ,  Si^^^i^^'   . 

value  received. 


If  the  above  note  read  "I  promise  to  pay  James  T.  Johnson,"  omitting  the  clause,  "to  the 
order  of,"  the  note  would  be  non-negotiable. 

If  the  above  note  had  been  made  payable  to  "James  T.  Johnson  or  bearer,"  it  would  have 
been  negotiable  by  delivery. 


n<S 


BUSINESS  FORMS. 


{Joint  Note — Payable  at  Bank — Interest) 


; , '^'^^^...^^     aft^p  dat^     ^^     ppoiT)isc  to  pay 

to  the  opdep  of     ^^^^(^-M'  t^-f^d  ^^^i^^^/i^W 

with  interest  at  the  rate  of    8    per  cent  per  annum,  value  received. 


The  above  note  holds  the  two  signers  jointly  responsible  for  payment,  the  same  as  partners 
are  jointly  held. 

If  the  latter  signed  the  note  as  surety,  he  would  write  the  word  su'rety  after  his  signature, 
and  in  that  case,  would  not  be  held  responsible  for  payment  until  the  first  signer,  called  the 
principal,  failed  to  pay. 


{Dne  Dill — Demand — Cash.) 


^127 

One  Hundred  Twenty-seven. 


WiLBRAHAM,  Mass.,  April  19,  189.. 
Due  Carl  Zimmerman,  or  order,  on  demand, 

Dollars. 

D.  E.  Wilton. 


Due  bills  are  classed  with  promissory  notes,  because  they  are  written  promises  to  pay. 
If  the  due  bill  is  not  payable  in  money,  the  commodity  in  which  it  is  payable  will  be  named 
in  the  next  line  following  the  amount. 


DRAFTS. 


Drafts  are  orders  drawn  by  one  firm,  addressed  to  another  firm,  and  directing  the  payment 
of  money  to  a  third  person  or  his  order.  They  are  usually  made  payable  at  sight  or  a  stated 
time  after  sight  or  after  date. 

Drafts  drawn  by  bank?  and  addressed  to  other  banks  directing  the  payment  of  money  to 
parties  named  in  the  drafts,  are  called  bank  drafts.  Bank  drafts  are  payable  on  demand,  with- 
out days  of  grace. 


BUSINESS  FORMS.  119 


4 

{Bank  Draft — Sight) 


f^ay  to  fb^  opd^p  of   ^^'^^^^^  ^  P-alUui^^^  |  ^7.^.:^^... 


T'O  THE  CENTRAL  NATIONAL  BANK, 

CfilCflGO. 


Cashier. 


If  Gilbert  and  Patterson  desire  to  send  money  by  mail,  they  will  avoid  the  risk  of  loss  by 
purchasing  a  draft  at  their  own  bank,  which  is  made  payable  at  some  commercial  center,  and 
this  draft  being  payable  only  after  being  properly  indorsed,  reduces  the  risk  to  the  very  least 
amount. 

It  is  advisable  for  the  firm  sending  the  draft  to  have  it  drawn  payable  to  themselves,  after 
which  they  can  indorse  it  to  the  firm  they  desire  to  pay,  and  thus  show  the  complete  chain  of 
ownership. 

Individual  drafts  are  drawn  by  one  individual  or  firm,  on  another  individual  or  firm, 
and  may  be  made  payable  at  sight  or  at  a  given  period  after  sight. 


5 

{Itidividual  Draft — Time) 


u^  /^//A;  da-^^^  lua^d-,  '^^ali  to  the  opdf  p  of 


WITH   EXCHANGE. 

value  received,  and  charge  to  account  of 

"Tn  John  Brown,  \  ^         ^       ,^ , 

^°  l..a„... I  /     a,    Tft^U^ 

Iowa.  \ 

John  Brown  indicates  his  acceptance  of  the  draft  and  makes  agreement  to  pay  it,  by  writing 
across  the  face  of  the  draft  the  word  "Accepted,"  giving  the  date  and  signing  his  name.  [See 
text  page  40  for  a  written  form  of  acceptance.] 


120  BUSINESS  FORMS. 


BANK    CHECKS. 

A  check  is  an  order  on  a  bank,  drawn  by  a  person  having  or  assuming  to  have  sufficient 
funds  in  the  bank  to  pay  the  check.  Checks  are  generally  written  payable  to  order,  if  they  are 
likely  to  be  carried  for  several  days  or  to  be  sent  by  mail ;  and  payable  to  bearer,  if  they  are 
likely  to  be  taken  to  the  bank  at  once,  unless  the  person  giving  the  check  wishes  to  retain  the 
cancelled  check  after  it  has  been  paid  and  returned  to  him  by  the  bank.  Such  a  check  made 
payable  to  order  and  endorsed  by  the  party  receiving  it,  is  the  best  form  of  receipt,  being  com- 
plete evidence  of  the  payment. 


{Bank  Check  Payable  to  Order) 


f^ay  to  \\)t  opd^p  of    h^.....^.^^l.:..  %  Jt^.J'^'S' 


A  bank  check  should  be  presented  for  payment  not  later  than  the  day  after  it  has  been  re- 
ceived, or  if  the  check  is  sent  to  a  distance,  it  should  be  collected  as  soon  as  practicable.  If  the 
holder  of  a  check  has  not  shown  due  diligence  in  presenting  it  for  payment,  and  the  bank  should 
fail  before  he  collects  it,  the  holder  of  the  check  must  suffer  its  loss.  But  if  the  drawer  of  the 
check  has  not  kept  sufficient  funds  in  the  bank  to  pay  the  check,  and  the  bank  refuses  its  pa\  - 
ment,  the  drawer  becomes  responsible  to  the  holder  of  the  check. 

Checks  are  sometimes  drawn  payable  at  some  future  day,  in  which  case  they  are  not  pre- 
sented for  payment  until  the  time  expires. 

If  the  bank  cashes  a  forged  check,  the  bank  must  lose  the  amount,  and  not  the  person 
whose  name  has  been  forged. 

If  the  party  is  responsible  for  whom  such  a  check  has  been  cashed,  the  bank  can  require 
him  to  redeem  the  forged  check. 

Persons  frequently  prefer  to  carry  a  bank  check  for  some  time,  instead  of  taking  the  risk  of 
losing  the  money.  In  such  case,  it  is  customary  to  present  the  check  to  the  cashier,  and  if  the 
depositor's  account  is  good,  the  cashier  writes  on  the  face  of  the  check  the  word  "certified,"  and 
his  official  signature,  and  debits  the  amount  to  the  depositor;  the  check  becoming  a  liability  of 
the  bank,  the  same  as  an  accepted  draft  would  be.     This  process  is  called  "certifying  a  check." 


CERTIFICATES    OF   DEPOSIT. 

When  a  party  places  money  in  bank,  which  he  does  not  intend  to  draw  out  for  some  time, 
he  usually  takes  a  certificate  from  the  cashier  of  the  bank,  which  is  made  negotiable,  and  in  all 
respects  similar  in  character  to  a  note  due  on  demand. 


B  USINESS  FORMS.  1 2 1 

{Demand  Certificate) 
»tf    30t*  Eureka,  Ills.,  Sept.  g,   jgg 

Business  College  Bf\NK 

I  Hereby  Certify,  That tE'^L^^^n"'^! „ 

has  deposited  in  this  bank ^"^L^^'^i. DOLLARS, 

payable  to  his  order,  on  surrender  of  this  Certiticate. 

Mq      /^p  .  R.  E.  Quinlan 

Cashier. 

A  time  certificate,  one  payable  at  a  specified  date,  would  insert  the  time  after  the  word  pay- 
able ;  as  "payable  six  months  fi-om  date,  to  his  order,  on  surrender,  etc." 


ORDERS. 


An  order  is  very  similar  to  a  sight  draft.  It  differs  from  it  mainly  in  the  fact  that  the  order 
is  usually  addressed  to  a  party  residing  in  the  vicinity  of  the  drawer.  The  order  may  be  drawn 
payable  in  money  or  in  chattels. 


{Money — Negotiable) 

^ji^,  Fenton,  Mich.,  June  6,   189.. 

Mr.  J.  G.  I'himb  will  please  pay  to  the  order  of  Myron  Chandler,  Seventy-five  Dollars, 

and  charge  the  same  to  my  account. 

H.  H.  Rambler. 


9 

{Merchandise — Non-Negotiable. 


;^37.  Greenwich,  R.  I,,  July  i,   189.. 

Mr.  M.  B.  Hartman, 

Please  let  Charles  N.  Parker  have  Thirty-seven  Dollars,  in  merchandise 
from  )  oui  store,  and  charge  the  same  to  my  account. 

Hiram  Chesterfield. 


122 


BUSIJVESS  FORMS. 


INDORSEMENTS. 

Indorsements  are  entries  written  on  the  back  of  any  paper.  They  are  either  a  transfer  of 
title,  a  giving  of  security,  or  a  receipt  for  a  payment  applying  on  the  contract  indorsed. 

When  a  paper  is  written  payable  to  the  order  of  John  Sones,  and  he  wishes  to  transfer  his 
title  to  Henry  Sherwood,  he  writes  on  the  back  of  the  paper  an  order  for  its  payment  to  Sher- 
wood. 

For  the  convenience  of  bank  tellers,  and  others  who  have  large  numbers  of  such  indorsed 
papers  to  handle  daily,  it  is  well  to  write  the  indorsement  across  the  left  end  of  the  paper. 

On  negotiable  papers  that  are  likely  to  have  several  indorsements,  care  should  be  taken  to 
write  the  indorsements  as  close  together  as  is  convenient.  If  the  back  of  the  paper  should  be 
covered  with  indorsements,  other  indorsements  can  be  written  on  blank  paper  attached  to  the 
original. 

lO 


{horms  of  Indorsement^ 


1 

u 

O 

c 
o 

(U     U 

X!    m 

m 

tfi 

tfi 

t/3 

in  w 

C  CO 

O          ^ 

O 

9> 

? 

9. 

T3    t 

(u  o 

the  Col 
,  Mich., 

HN  SoNE 

^  CD 

•^ 

2i 

e    ^ 

X 

§ 

i* 

as 

•? 

8Q 

^-. 

>3 

>    K 

K 

o  •— > 

S  i^ 

•<<;' 

o 
1 — » 

^ 

o 
.  t— > 

*•* 

1 

^  4i^    o 

o  :2  >— . 

1 

"i 

O 

8 

>.8 

"^     O 

■5 

8 

u. 
3 
O 
o 

10  1" 

r3 

order 
d  Rap 

(U 

o 
a, 

1 

s 

3 

5l 

^ 

^  S 
^O. 

i 

13 

c 

o 

O    '" 

:s 

o 

«j 

-M 

-M    -Z 

CQ 

.  c 

i:  <*-   o 

o 

^  8 

T3 

Pay 
Bank  c 
collecti 

4-1 

o 

No.  I  transfers  the  ownership  from  Sones  to  Sherwood. 

No.  2  transfers  ownership,  but  relieves  Sones  from  any  responsibility  if  the  note  is  not  paid 
when  due. 

No.  3  transfers  the  ownership  to  any  party  who  may  hold  the  note,  making  it  in  effect  pay- 
able to  the  bearer. 

No,  4  transfers  the  ownership  as  in  No.  3,  except  that  it  relieves  Sones  from  further  re- 
sponsibility. 

No.  5  is  a  receipt  for  money  paid  to  apply  on  the  promise  indorsed.  Such  indorsements 
need  no  signature. 

No.  6  does  not  transfer  the  ownership  of  the  paper  to  the  bank,  but  merely  gives  authority 
to  the  bank  to  collect  the  paper  as  Sones's  agent. 

No.  7  renders  Sones  liable  as  surety  without  a  formal  notice  or  protest,  as  the  law  usually 
requires. 


RECEIPTS. 


A  receipt  is  a  written  acknowledgment  of  the  giving  of  a  value,  or  the  fulfillment  of  a 
promise. 

The  essential  elements  are  place  and  date,  of  whom  received,  what  or  how  much  received, 
for  whatj^nd  the  name  of  the  one  receiving. 


BUSINESS  FORMS. 


^2i 


11 

[Receipt — Ofi  Account. 


Stillwater,  Minn.,  Aug.  20,      />?^ 

(ff^ecGwed  of       ^^^^7  ^-  ^^^^^^^^^^^^^ 

One  Hunded  Twentv-seven  and  7S_    ^^n///J p*^ 

to  apply  on  accoimt. 

i2y.y^  George   IV.   Carter 


A  receipt  given  for  money  whicn  was  never  paid  is  like  a  note  without  a  consideration.  It 
cannot  be  made  binding  in  law.  So  a  receipt  given  in  full  of  an  account,  when  only  a  part  of 
the  account  was  paid,  is  not  binding,  unless  the  account  was  under  dispute  and  a  comprornise 
was  agreed  upon,  or  unless  it  was  paid  before  the  time  agreed  upon,  or  paid  in  a  place  or  man- 
ner not  agreed  upon ;  in  which  case  the  deviation  from  the  contract  could  be  taken  as  the  re- 
mainder of  the  consideration. 


MARGINAL  RECORDS. 

The  business  forms  printed  for  general  use  are  bound  in  books  of  convenient  form  and  size, 
and  so  arranged  that  single  sheets  can  be  torn  out  and  used.  On  the  left  margin  of  each  sheet 
is  a  blank  space  that  remains  in  the  book,  with  a  memorandum  of  the  sheet  that  is  torn  out.  This 
margin  is  called  the  stub  of  the  note,  check,  or  draft,  and  the  important  facts  that  should  be  re- 
corded on  the  stub  are  the  date  and  number  of  the  paper,  to  whom  issued,  the  amount,  and 
for  what  it  was  given. 

Thus,  if  Johnson  &  Turner  had  given  their  check  No.  13  to  Oscar  Simmons  for  rent  one 
month,  the  check  and  stub  would  be  filled  out  as  follows : 

12 

[Check  and  its  Mafgin) 


^^t-Ji 189 -• 

No. 'I 

pgynp     Oscar  Simmons 

%.JMo 

For     ^^'*'  "^  month- 


Austin,  Texas,  Sept.  i,  IQO*  •    NO       ^^ 

Second  National  Bank 

Pay  to  II16  order  of  ^'i  :?^^'^'':' 

V't^y:'^^!.'^. Too  Dollars,  %.37:5o.. 


Johnson  &   Turner 


^f  THt 


1 24  B  US W ESS  FORMS. 


These  marginal  records  being  retained  by  the  one  issuing  them,  serve  a  double  purpose. 
They  assist  him  in  keeping  a  record  of  the  amounts  he  has  drawn  from  the  bank,  and  the  num- 
bers of  the  checks  ;  and  what  applies  equally  to  all  classes  of  paper,  they  assist  him  in  keeping 
a  memorandum  of  his  transactions  until  it  is  convenient  to  enter  them  on  his  books. 


REHARKS   AND    LEGAL    POINTS. 

The  preceding  forms  (receipts  excepted)  comprise  the  varieties  that  are  ordinarily  grouped 
together  under  the  general  title  of  Commercial  Paper.  The  note  and  the  certificate  of  deposit 
are  promises,  while  the  draft,  check,  and  order  are  each  orders  to  a  second  party  directing  pay- 
ment to  a  third;  all  of  the  varieties  last  enumerated  may  become  promises  by  acceptance  or 
certification. 

The  drawee  of  a  draft,  check,  or  order,  corresponds  to  the  maker  of  a  note ;  the  payee  is 
common  to  all ;  while  the  drawer  of  a  draft  or  check  corresponds  to  the  indorser  of  a  note. 

Date.  If  a  paper  is  not  dated,  and  the  time  of  payment  is  not  specified,  it  is  considered 
due  at  any  time. 

Place  of  Payment.  If  the  place  of  payment  is  specified  on  a  note,  the  maker  is  expected 
to  call  at  that  place  and  pay  the  note  when  due.  Leaving  the  note  at  the  place  of  payment  on 
the  day  it  is  due,  is  considered  the  same  as  demanding  payment.  If  no  place  of  payment  is 
designated,  it  is  then  payable  wherever  it  is  held. 

A  draft  or  check  is  payable  at  the  drawee's  place  of  business  :  and  if  not  in  business,  at  his 
residence,  or  wherever  he  may  be  found. 

Time  of  Payment.  Checks  and  orders  are  generally  payable  on  demand  or  at  sight,  and 
are  not  entitled  to  days  of  grace. 

All  classes  of  commercial  paper  that  are  negotiable,  and  that  are  made,  payable  a  certain 
time  after  date,  after  sight,  or  after  any  given  event,  are  entitled  to  three  days  more  than  the 
specified  time,  these  being  called  days  of  grace. 

If  the  last  day  of  grace  falls  on  Sunday  or  on  a  legal  holiday,  the  paper  is  payable  on  the 
second  day  of  grace;  but  if  the  second  and  third  days  of  grace  are  occupied  by  a  holiday  and  a 
Sunday,  then  the  paper  falls  due  on  the  day  following  the  third  day  of  grace. 

A  note  payable  on  demand  is  not  due  until  it  is  presented  for  payment,  and  is  not  entitled 
to  days  of  grace. 

In  computing  the  time  of  payment  on  papers  written  payable  a  certain  number  of  days 
after  date,  we  count  the  actual  days  in  each  month  up  to  the  time  of  payment ;  but  if  the  time 
in  specified  in  months,  we  count  calendar  months.  Thus,  note  No.  i  is  due  30  days  after 
Sept.  3,  or  Oct.  6,  allowing  the  days  of  grace.  No.  2  is  due  Mar.  14.  A  note  dated  P'eb.  28, 
and  payable  in  one  month,  is  due  March  31  ;  but  if  payable  in  30  days,  it  is  due  April  2,  if  in  a 
common  year,  and  April  i ,  if  in  a  leap  year.  A  note  dated  Jan.  2'8,  29,  30,  or  3  i ,  and  payable 
in  one  month,  will  fall  due  March  3.  The  same  note  at  thirty  days  will  fall  due  March  2,  3, 
4  or  5. 

Consideration.  The  expression  "value  received"  indicates  that  the  paper  has  been  given 
for  value.  The  words  are  not  strictly  necessary  in  negotiable  paper,  because  the  law  assumes 
that  a  valuable  consideration  was  received,  or  the  note  would  not  have  been  given. 

A  paper  that  is  given  without  consideration  cannot  be  collected,  if  it  is  still  held  by  the  one 
to  whom  it  was  made  payable. 

Payable  in  Money.  All  commercial  papers  arc  considered  payable  in  money,  unless 
otherwise  stated.     A  paper  that  is  not  payable  in  money  cannot  be  classed  as  negotiable  paper. 

Amount.  The  amount  should  be  written  in  words  in  the  body  of  the  paper,  and  also  ex- 
pressed in  figures.  If  there  is  a  discrepancy  between  the  words  and  figures,  the  words  are  con- 
sidered correct. 

Interest.  If  interest  is  to  be  paid,  it  is  better  to  state  the  rate  agreed  upon.  If  the  rate  is 
not  specified  in  the  paper,  it  will  draw  interest  according  to  the  law  of  the  state  where  it  is 
payable. 

All  varieties  of  commercial  paper,  if  not  paid  when  due,  are  subject  to  legal  interest,  whether 
't  is  specified  in  the  paper  or  not. 


BUSINESS  FORMS.  125 


Negotiable  Paper.  Negotiable  paper  is  such  as  can  be  transferred  from  one  to  another 
by  indorsement  or  merely  by  delivery.  It  is  written  payable  to  order,  or  bearer.  It  is  entitled 
to  days  of  grace  on  all  time  paper. 

In  order  to  be  classed  as  negotiable  paper,  and  share  its  special  privileges,  it  must  be  pay- 
able in  money;  it  must  also  be  payable  absolutely,  that  is,  the  payment  cannot  be  based  on  a  con- 
tingency which  may  or  may  not  happen. 

Nox- Negotiable  Paper.  Notes  and  other  commercial  papers  are  non-negotiable,  when 
they  are  not  written  payable  to  order  or  bearer,  and  when  they  are  made  payable  in  merchan- 
dise or  chattels. 

Indoksemexts.  The  special  laws  governing  indorsements  pertain  only  to  negotiable  paper; 
because,  non-negotiable  paper  is  usually  only  transferable  by  assignment. 

A  paper  that  is  made  payable  to  a  certain  person  or  order,  or  to  the  order  of  a  certain  per- 
son, must  have  his  name  indorsed  upon  it,  in  order  to  effect  a  transfer  of  the  paper  to  a  third 
party.  His  indorsement  is  not  only  a  transfer  of  ownership,  but  also  a  guaranty  or  surety  for 
the  payment  of  the  paper. 

The  indorser  of  a  paper  is  responsible  for  its  payment,  if  the  maker  or  payer  fails  to  pay  it. 

Each  indorser,  unless  he  qualifies  his  indorsement,  as  in  indorsements  2  and  4,  virtually 
executes  a  warrant  to  every  subsequent  holder: 

That  the  paper  is  what  it  represents  to  be. 

That  he  has  a  good  title  to  it. 

That,  if  the  paper  is  dishonored,  he  will  upon  due  notice,  unless  such  notice  is  excused, 
pay  the  amount  due  thereon. 

Other  parties  who  have  had  no  relation  to  the  paper  may  write  their  names  as  indorsers  in 
blank  (written  like  indorsement  3,)  thereby  becoming  surety  for  the  payment  of  the  paper. 

Rights  of  the  Maker  or  Payer.  The  maker  of  a  note,  or  the  drawee  or  acceptor  of  a 
draft  may  refuse  payment  of  the  same  under  certain  circumstances,  usually  based  on  the  follow- 
ing conditions,  called  legal  defenses : 

1 .  Want  of  consideration,  either  total  or  partial.  If  the  paper  was  given  without  value, 
he  is  not  obliged  to  pay  it;  or  if  he  has  received  only  a  part  of  the  value  named,  he  can  be  made 
to  pay  only  that  amount,  provided  the  payee  still  holds  the  paper. 

If  the  payee  has  indorsed  it,  before  it  was  due,  to  an  innocent  purchaser,  that  is,  one  who 
knew  nothing  regarding  the  want  of  consideration,  the  purchaser  can  collect  the  paper,  even 
when  the  consideration  was  incomplete. 

2.  Obtained  by  Fraud.  If  it  can  be  shown  that  the  note  was  obtained  by  fraud,  the  maker 
is  not  obliged  to  pay  the  payee;  but  an  innocent  holder  may  collect  the  note. 

3.  Obtained  by  Finding.  The  maker  cannot  be  compelled  to  pay  the  party  having  found 
a  note;  but  a  man  who  has  purchased  it  from  the  finder  for  a  consideration,  provided  he  knew 
nothing  of  the  circumstances,  and  provided  that  it  is  payable  to  bearer,  or  openly  indorsed,  can 
enforce  its  payment. 

4.  Obtained  by  Theft.  The  one  having  stolen  a  note  cannot  enforce  its  payment;  but  one 
who  has  purchased  it  in  good  faith,  even  from  the  thief,  provided  it  is  payable  to  bearer,  or 
openly  indorsed,  has  a  perfect  title  to  it.  [This  law  of  title  pertains  to  no  other  class  of  stolen 
property  except  negotiable  paper.] 

5.  Lapse  of  Time.  If  any  paper  remains  unpaid  for  more  than  six  years  after  it  is  due, 
and  no  partial  payment  has  been  made  on  it,  its  collection  cannot  be  enforced  by  any  one. 
The  length  of  time  varies  in  different  states. . 

6.  Forged  Paper.  A  paper  with  a  forged  signature  is  worthless  even  to  an  innocent  pur- 
chaser, except  as  he  may  have  recourse  to  a  genuine  indorser. 

7.  Amount  Raised.  A  paper  whose  amount  has  been  raised  by  substituting  a  larger 
amount  for  the  one  originally  written,  is  good  for  the  original  amount,  the  amount  raised  being 
treated  the  same  as  a  forgery. 

Rights  OF  Purchasers.  In  order  that  the  various  classes  of  negotiable  paper  may  be  of 
the  greatest  use  to  the  commercial  world,  that  they  may  be  used  with  great  freedom  in  the  place 
of  money  in  the  various  transactions,  the  law  has  granted  this  class  of  property  special  privi- 
leges, and  has  given  purchasers  of  such  property  peculiar  rights,  that  pertain  to  no  other  variety 
of  property. 


126  BUSINESS  FORMS. 


If  a  person  buys  any  negotiable  paper  before  it  falls  due,  and  gives  a  valuable  consideration 
for  it,  he  can  collect  it,  even  if  it  was  given  without  value,  or  if  it  was  stolen;  in  other  words, 
the  law  sustains  him  in  taking  the  paper  for  just  what  it  says ;  provided,  the  signature  is 
genuine,  and  the  paper  is  not  yet  due.  If  the  paper  is  past  due  and  remains  unpaid,  it  is  pretty 
conclusive  evidence  that  the  maker  of  the  note  has  some  good  defense;  hence,  a  person  pur- 
chasing a  paper  after  it  is  due,  must  take  it  subject  to  any  defense  that  may  exist  between  the 
maker  and  the  payee. 

A  purchaser  of  a  .orged  paper  does  not  have  any  peculiar  rights  ;  because,  the  law  regards 
a  forged  paper  merely  as  any  piece  of  blank  paper,  so  far  as  it  represents  property  value. 

Rights  of  Indorse rs.  In  order  to  hold  indorscrs  responsible  for  the  payment  of  negoti- 
able paper,  it  must  be  presented  to  the  maker  for  payment  when  due ;  and  in  case  of  non-pay- 
ment, the  indorser  must  be  notified  at  least  by  the  day  following  the  dishonor  of  the  paper. 
This  notice  may  be  given  personally,  or  it  may  be  a  written  notice,  directed  to  the  indorscr's 
address,  and  deposited  in  the  postoffice,  postage  prepaid,  not  later  than  one  day  after  the  dis 
honor. 

An  indorser  may  wish  to  avoid  the  trouble  and  expense  of  sending  notices,  and  also  of 
writing  a  protest  for  non-payment;  in  such  case,  he  writes  "Notice  and  Protest  Waived"  above 
his  signature  in  the  indorsement,  thus  making  himself  responsible  without  receiving  notice  and 
protest. 

Presumptions  of  Law.  The  law  presumes  certain  facts  regarding  commercial  paper;  just 
as  it  presumes  any  man  innocent  until  his  guilt  is  clearly  proven. 

These  things  presumed  by  law  must  be  disproven,  if  any  person  would  establish  any  con- 
trary fact  regarding  them.     These  presumptions  are : 

I.     A  valuable  consideration,  whether  expressed  on  the  paper  or  not. 
•    2.     That  the  holder  of  the  paper  is  the  owner,  unless  circumstances  indicate  otherwise. 

3      That  the  transfers  and  indorsements  were  made  before  the  maturity  of  the  paper. 

4.  That  the  holder  received  the  paper  for  value,  in  some  business  exchange. 

5.  That  the  maker  of  the  paper  meant  just  what  was  expressed  on  the  paper. 

NOTICE  OF   NON-PAYMENT. 

As  soon  as  any  paper  that  has  been  indorsed  becomes  due  and  payment  is  not  made  by 
the  maker,  the  indorsers  should  be  notified  by  the  holder  of  the  paper,  if  he  desires  to  make 
them  responsible  for  the  payment  of  the  paper.  The  notice  may  be  given  verbally  or  in  writ- 
ing.    In  either  case  it  should  describe  the  dishonored  paper  with  reasonable  certainty. 

This  notice  may  be  given  by  the  holder  of  the  paper  or  by  any  party  connected  with  it, 
Wiio  may  be  called  on  to  pay  the  holder,  and  may  be  sent  to  each  indorser  from  whom  the 
holder  would  have  the  right  to  reimbursement.  The  drawer  of  a  check  or  draft  should  be  noti- 
fied, in  case  of  non-payment  or  non-acceptance. 

13 

{Notice  of  Non-Payment)) 

Note  No.  I ,  if  indorsed  by  the  payee,  James  T.  Johnson,  to  the  present  holder,  Charles 
Graham,  would  require  the  following  notice,  if  not  paid  at  maturity,  which,  according  to  the 
note,  would  be  Oct.  6,  189.  . 

Waco,  Texas,  Oct.  7,   189... 
Mr.  James  T.  Johnson, 

Denison,  Texas. 

Dear  Sir: — Please  take  notice  that  a  note  for  ($249.25)  Two  Hundred 
Forty-nine  !-§  Dollars,  signed  by  Henry  Thompson,  dated  Sept.  3,  189..,  due  Oct.  6,  189.., 
and  indorsed  by  you,  was  duly  presented  by  me,  the  holder,  to  the  maker,  for  payment,  and 
was  not  paid ;  therefore,  I  shall  look  to  you  for  payment  of  the  above  mentioned  note. 

Respectfully, 

Charles  Graham. 


D  USINESS  FORMS.  ,  2  ; 


PROTEST. 

A  protest  is  a  formal  declaration  made  by  a  notary  public,  giving  a  copy  of  a  bill  or  a 
note,  or  referring  to  the  original  paper  annexed  to  the  protest,  and  stating  that  its  acceptance  or 
payment  has  been  demanded  and  refused,  giving  the  reason  of  the  refusal,  if  any,  and  also  stat- 
ing the  object  of  the  protest. 

The  protest  is  necessary  in  case  of  the  dishonor  of  foreign  bills,  and  it  may  or  may  not  be 
made  in  case  of  dishonor  of  drafts  and  notes. 

In  case  of  protest,  the  notary  usually  writes  the  notices  of  non-payment,  and  mails  a  copy  of 
the  notice  to  each  indorser  on  the  paper  protested. 

14 

{Protest  for  Non-Payment) 

The  bank  draft  given  on  a  lormer  page,  if  indorsed  by  Gilbert  &  Patterson  to  Archer  & 
Parton,  would  require  the  following  protest  to  be  drawn  by  a  notary  public,  in  case  the  Central 
National  Bank  of  Chicago,  should  refuse  payment. 

STATE  OF  ILLINOIS,  1 
Cook  County.  J 

On  the  Twelfth  day  of  November,  A.  D.  1 89 .  . ,  at  the  request  of 
Archer  &  Parton,  the  holders  of  the  original  bill  hereto  attached,  I,  Richard  Blank,  a  Notary 
Public,  duly  appointed,  commissioned  and  qualified,  residing  in  Chicago,  in  the  County  and 
State  aforesaid,  did  present  the  original  bill,  which  is  annexed  hereto,  and  demanded  payment 
of  the  drawee  thereof,  which  was  refused. 

Whereupon,  I,  the  said  Notary,  at  the  request  aforesaid,  did  PROTEST,  and  by  these 
presents  do  solemnly  PROTEST  as  well  against  the  drawee  and  indorsers  of  said  bill  as  against 
all  others  whom  it  doth  or  may  concern  for  exchange,  re-exchange  and  all  costs,  damages,  and 
interest  already  incurred,  and  to  be  hereafter  incurred,  by  reason  of  non-payment. 

And  on  the  day  and  year  above  written,  I  deposited  due  notice  of  the  foregoing  protest  in 
the  postoffice  in  Chicago  aforesaid,  postpaid,  signed  by  me,  as  follows : 

Notice  for  Gilbert  &  Patterson,  directed  Mansfield,  Ohio. 

Notice  for  Students'  Commercial  Bank,  directed  Mansfield,  Ohio. 

Each  of  the  above  named  places  being  the  reputed  place  of  residence  of  the  persons  to 
whom  said  notice  was  directed  respectively.   ' 

FEES. 

Protesting     75  cents  In  Testimony  Whereof,  I  have  hereto 

Notices          ID     "  set  my  hand  and   Notarial   Seal  at 

Registering  50     "  -                                  Chicago  aforesaid,  the  day  and  year 

Demand        50     "  above  written. 

Postage         10     "  Richard  Blank, 

$1.^^  Notary  Public  in  and  for  Cook  County. 

BILLS. 

The  term  bill,  as  commonly  used,  refers  to  a  statement  of  the  items  of  a  sale  ;  or  of  the 
indebtedness  of  one  party  to  another  for  services  rendered ;  or  the  statement  of  an  account. 

It  is  customary  for  wholesale  dealers  to  send  statements  of  account  at  the  end  of  each 
month,  to  all  who  are  indebted  to  them ;  so  that  the  accounts  may  be  corrected  if  they  arc 
wrong,  and  also  that  collections  may  be  kept  up  promptly. 

An  account  current  differs  from  a  monthly  statement,  in  that  it  contains  an  itemized  list  of 
the  debits  and  credits,  while  a  statement  contains  merely  the  aggregate  of  each  debit  and  credit, 
assuming  that  a  bill  of  items  has  already  been  sent  for  each.  It  is  used  in  business  when  item- 
ized bills  have  not  been  sent  with  each  purchase. 


128 


BUSINESS  FORMS. 


15 


oM^.    Q^e^Ui  ^i 


ih 


{Sale  of  Merchandise.) 

<Jt.    IPaul   oMlrin..,   ^a^.    3,    48^/- 


ui-nfud-n, 


'Mi.  qMu 


t/yvn. 


Sales,  195. 
Polio,  224. 
Salesman,  Jones. 
Terms,  30  days. 


Bought  of  SHARP  &  STRONG, 

WHOLESALE  GROCERS, 
129  &  131  Capitol  St. 


3 
S 


160  and  162, 


ch.    C/.    Q^.    Qjea,    _^  J5_  j± 
lloiu.    qJL   (^J^uaai   j8   JO   _22^ 


s.n  Ui. 

.48 

5'J  (J  to 

W5    ■■■ 

.us 

Slo 

■10 

sm  ■■ 

■OSj 

7c3 

mo  ■■ 

.Oloi 

/5 

loO\s33 

li 

16 

{Statement  of  Account.) 


o/l/Um.    Sa,Ai  P  %<,., 


ec.  34,  48^- 


(^ieeieu,     iD<^'^. 


In  Acc't  with  BAKER  &  STUART. 


JJjeo. 

4 
42 

23 

48 

C^l/idie.    jiel   Mi  iendeied 

4'25 

3Sq 

(^8 

75 
(ok 

55S 
Si)S 

Ob 

S50 
4S 

05 

£ec. 

^^di/i  jiei   dialt 
(jCeittie,   inMaae  CJLn-u.  42iA  t^i^it. 
ilOaia^^ce   due 

05 

S(fO 

BUSINESS  FORMS. 


129 


O/I/Il.    Q^aii^u   S^e 


f4^n. 


\1 

{For  Services.) 

^^til*  l£c.ck  odd..  (J 4 it.  U.  '18(J- 
To  G.  R.  BRONSON,  Dr. 


5      "        "        j ilai'teU'yva                                 3.S5 

1 

30 

d 

S5 

•Id 

S5 

ACCOUNT  SALES. 

An  account  sales,  or  strictly  an  account  of  sales,  is  a  detailed  statement  of  a  consignment 
of  merchandise,  rendered  by  a  commission  merchant  to  the  party  having  made  the  consignment. 
It  is  a  copy  of  the  account  as  shown  on  the  commission  merchant's  sales  book  ;  except  that  the 
sales  representing  credits  are  classed  first,  and  the  expenses  or  payments,  representing  debits, 
are  grouped  below  the  sales,  instead  of  the  two  occupying  right  and  left  pages  of  an  account. 

18 

{Account  Sales  of  Fruit}) 

Ottumvva,  Iowa,  Sept.  28,  189.. 
Messrs.  A.  E.  Maxwell  &  Co., 

Muskegon,  Mich., 

Dear  Sirs:  —  Below  please  find   account  of  sales    by 

Hanlan  &  Co.,  of  200  baskets  Peaches,   100  baskets  Grapes Received  Sept.  21,  189. . 

per  Am.  P^xpress  Co.,  and  sold  for  account  of  yourselves. 
Sale  No.  295.     Folio  74. 


189.. 

Sept. 

22 

25 
27 

22 

2J 

Sales. 

Cash  Sales  75  baskets  Peaches 
50               "               Grapes 

Sales  on  Acct.  50  "  Peaches 
20               "               Grapes 

Cash  Sales  75  "  Peaches 
30               "               Grapes 

Charges. 

Express  $2"^,  advertising  ;^3, 
Commission  5  per  cent. 

Net  proceeds  to  your  credit. 

.60 
.40 

•35 
.60 

V5^ 

45 
20 

31 

7 

45 

1 1 

25 
25 

159 
35 

50 

189.. 
Sept. 

28 
7 

98 

98 

123 

52 

I30 


BUSINESS  FORMS. 


INVOICES  OF  SHIPMENT. 

A  party  shipping  any  variety  of  merchandise  to  a  commission  merchant  for  sale,  usually 
mails  a  detailed  statement  or  list  of  the  goods  sent,  when  sent,  by  what  route,  and  for  what  pur- 
pose. 

It  is  not  usual  for  the  consignor  to  fix  any  price  on  staple  goods,  as  the  consignee  is 
expected  to  obtain  the  best  prices  he  can  for  the  goods  sold.  Consignors  sometimes  write  an 
estimated  cost  price,  merely  to  govern  the  consignee  in  his  estimate  of  the  selling  price. 

{Invoice  of  Fruit) 

Muskegon,  Mich,,  Sept.   19,   189.. 
Messrs.  Hanlan  &  Co., 

Ottumwa,  Iowa, 
Below  we  hand  you  an  invoice  of  Merchandise,  sent  you  this   day  per  American  E.xpress 
Co  ,  Freight  unpaid,  to  be  sold  on  account  and  risk  of  ourselves. 

Consignors,  A.  E.  Maxwell  &  Co, 


200 
100 


Baskets  Peaches,  Invoiced 
Del.  Grapes,  " 


.40 
.28 


80 
28 


108 


QUESTIONS  FOR  REVIEW. 

I.  What  is  a  promissory  note?  2.  Who  is  the  maker  of  the  note?  3,  Who  is  the 
payee?  4.  Who  is  the  indorser?  5.  What  is  an  indorsement?  6.  Who  is  the  indorsee  ? 
7.  Who  is  a  surety  of  a  note  ?  8,  When  is  a  note  said  to  be  negotiable  ;  when  non-negotia- 
ble ?  9.  What  words  or  clauses  render  a  note  negotiable?  10.  When  is  a  surety  responsi- 
ble for  the  payment  of  a  note?  11.  Why  are  due  bills  classed  as  notes?  12.  What  are 
drafts?  13.  What  difference  is  there  between  a  bank  draft  and  an  individual  draft?  14. 
What  difference  is  there  between  a  time  draft  and  a  sight  draft?  15.  How  are  time  drafts 
accepted?  16.  To  what  is  an  accepted  draft  equivalent?  17.  What  is  a  bank  check? 
18.  When  are  checks  generally  written  to  order,  and  when  to  bearer?  19.  When  should 
bank  checks  be  presented  for  payment  ?  20.  Who  becomes  responsible  for  the  payment  of  a 
check,  if  the  bank  refuses  its  payment  ?  21.  What  is  the  process,  termed  certifying  a  check  ? 
22.  What  is  a  certificate  of  deposit?  23.  How  does  an  order  usually  differ  from  a  draft? 
24.  What  seven  varieties  of  indorsement  can  you  describe  ?  25.  What  is  a  receipt?  26.  Is 
a  receipt  valid,  if  given  for  more  than  the  amount  received  ?  27,  What  records  should  be 
made  on  the  margins  of  blank  business  forms?  28.  The  maker  of  a  note  corresponds  to  what 
party  on  a  draft  ?  29,  The  payee  of  a  note,  to  what  party  ?  30.  The  indorser  of  a  note,  to 
what  party?  31.  If  the  time  of  payment  is  not  given,  when  is  any  commercial  paper  due? 
32.  Where  should  commercial  papers  be  paid  ? 
payable  after  date  or  after  sight?  34,  How  is 
How  estimated,  if  expressed  in  months  ?  36. 
received,  on  a  commercial  paper?  37,  How  is 
regarding  interest  on  commercial  paper  ?  39,  What  are  the  essential  elements  of  negotiable 
paper?  40.  What  double  contract  does  an  indorser  make?  41.  What  rights  or  defenses 
has  the  payer?  42.  What  special  rights  belong  to  purchasers  of  negotiable  paper?  43. 
What  are  the  rights  of  indorsers  ?  44.  What  are  the  presumptions  of  law  regarding  commer- 
cial paper?  45.  When  is  notice  of  non-payment  necessary?  46.  What  is  a  protest,  and 
when  is  it  used?  47.  How  often  are  statements  of  account  sent  to  debtors?  48,  What 
is  an    account  current?     49.  What  is  an  account  sales  ?     50.  What  is  an  invoice  of  shipment? 


33.  When  are  papers  estimated  due  that  are 
time  estimated,  if  expressed  in  days?  35. 
Is  it  necessary  to  express  the  term,  value 
the  amount  written?     38,     What  is  the  law 


MERCANTILE  TERMS. 


Ut 


riercantile  Terms. 


We  have  not  attempted  to  give  a  dictionary  of  all  the  terms  in  use,  but  have  selected  a 
Mst  of  the  more  common  words  and  phrases,  and  such  as  would  seem  of  special  utility  to  those 
preparing  for  business;  nor  have  we  given  all  the  definitions  that  belong  to  these  words.  It  has 
been  our  study  to  select  only  those  definitions  that  apply  particularly  to  the  commercial  use  of 
each  term  or  phrase. 

It  would  be  well  to  use  these  lists  as  lessons  for  oral  and  written  spelling  and  definition, 
until  the  scholar  can  write  correctly  and  use  correctly  each  word  in  the  list. 


A  CCEPT. 


-To  agree  to  pay  a  draft  at  maturity. 


Acceptance. — An  agreement  by  signature  to  pay  a  draft 
or  bill   according   to  its  terms.     Also  the  term  ap- 
plied to  the  bill  after  being  accepted. 
Accommodation. — The  loan  of  money  or  of  one's  name 

merely  as  a. favor. 
Accommodation   Paper. — Notes  or  bills  given  without 
actual  indebtedness  or  consideration,  to  be  used  for 
the  accommodation  of  some  other  person. 
Account. — The  arrangement  of  debits  and  credits  un- 
der the  name  of  a  person  or  some  appropriate  title. 

Accountant. — One  skilled  in  the  art  of  keeping  ac- 
counts. 

Account  Current. — A  running  account.  A  detailed 
statement  of  the  transactions  between  two  persons 
or  firms,  usually  expressed  in  the  form  of  debtor  and 
creditor 

Account  Sales. — An  itemized  statement  of  sales  and  ex- 
penses, sent  by  a  commission,  merchant  to  his  prin- 
cipal. 

Accrued — Interest  accumulated  and  unpaid. 

Acknowledgement. — A  formal  admission  made  before 
an  officer,  that  the  act  described  was  voluntarily 
done.  The  officer's  certificate  of  the  admission  is 
also  called  an  acknowledgement. 

Actuary. ^ — Anofficerof  life  insurance  companies,  skilled 
in  computing  annuities. 

Adjustment. — A  general  settlement;  usually  of  a  loss,  or 
of  a  disputed  account. 

Administrator. — One  that  is  legally  appointed  to  settle 
an  estate. 

Adulteration. — The  act  of  mixing  spurious  articles 
with  a  genuine  commodity. 

Ad  Valorem. — According  to  value.  A  custom  house 
term,  relating  to  the  estimating  of  duties  upon  the 
value  of  imported  goods. 

Advance. — Increase  in  prices.  Money  paid  on  goods 
before  their  delivery. 

Adventure. — A  shipment  of  goods  to  be  sold  on  the 
shipper's  risk. 

Advice. — Information  or  counsel  given,  usually  relative 
to  the  sale  or  purchase  of  goods. 

Affidavit. — A  written  declaration  under  oath. 

Agent.— One  who  acts  for  another,  usually  in  the  tran- 
saction of  business. 

Allowance. — A  deduction  made  for  various  reasons.  A 
stipulated  sum  granted  to  a  person. 

Annuity. — A   sum  of  money  payable  at  stated  periods. 

Ante-date. — To  date  before  the  present  time. 

Appraisal. — The  act  of  placing  a  value  on  goods. 

Appraiser. — One  who  makes  the  appraisal. 


Appurtenance. — A  minor  improvement,  a  right  or  a 
privilege  belonging  to  any  property  and  passing 
with  it  from  one  owner  to  another. 

Arbitration. — The  adjustment  of  a  disputed  point  by 
a  person  or  persons  chosen  by  the  parties  in  dispute. 

Arrears. — Dues  not  paid  at  maturity. 

Assess. — To  value  property  for  the  purpose  of  taxation. 
To  levy  a  tax. 

Assessor. — One  who  values  the  property. 

Assets. — Property  values  or  resources  of  any  kind. 

Assignee. — A  person  to  whom  the  property  of  a  bank- 
rupt or  an  insolvent  debtor  is  transferred  for  the 
benefit  of  the  insolvent's  creditors. 

Assignment. — The  act  of  transfering  property  to  the  as- 
signee. 

Asr.iGNOR. — One  who  makes  an  assignment. 

Assortment. — A  variety  of  sorts  or  kinds. 

Assume. — To  become  liable  for  the  promises  of  another. 

Assure. — The  same  as  insure,  which  is  written  more 
frequently. 

Attachment. — A  warrant  for  the  purpose  of  seizing  a 
man's  person  or  property. 

Attorney. — A  lawyer,  hvi  agent  usually  appointed  by 
written  authority  under  seal,  and  called  an  attorney 
in  fact. 

Auction. — A  sale  to  the  highest  bidder. 

Auctioneer. — One  who  sells  at  auction. 

Audit. — To  examine  and  prove  accounts. 

Auditor. — An  officer  appointed  by  government,  state  or 
county,  or  by  any  corporation,  to  examine  claims 
upon  the  treasury,  and  to  investigate  the  treasurer's 
accounts. 

Auxiliary, — Applied  to  various  account  books  that  are 
kept  as  aids  to  the  principal  books. 

Avails. — The  proceeds  of  property  sold. 

Average. — An  apportionment  of  a  loss  at  sea  amonj 
those  interested  in  ship  and  cargo.  The  mean  time 
of  payment  for  several  debts  due  at  different  times. 

Avoirdupois. — The  common  standard  of  weight  for  all 
articles  except  the  precious  metals  and  medicines. 

BAIL. — Surety  for  another;  especially,  surety  for  his 
presence  on  trial  at  a  stated  time. 

Bailment. — A  delivery  of  goods  to  be  held  in  trust. 

Balance. — A  term  used  to  denote  the  difference  be- 
tween the  sides  of  an  account. 

Balance  of  Trade. — The  difference  between  the  value 
of  the  imports  and  exports  of  any  country. 

Bank-book. — A  pass-book  carried  by  a  depositor,  n 
which  the  teller  of  a  bank  records  deposits,  and  in 
which  the  book-keeper  enters  the  paid  checks  at 
stated  intervals,  usually  at  the  end  of  each  month. 


132 


MERCANTILE  TERMS, 


Bank-Bills  or  Notes. — Promissory  notes  issued  by 
banks,  payable  on  demand,  and  used  as  money. 

Bankrupt. — One  who  is  unable  to  pay  his  debts,  and 
who  fails  in  business. 

Bears. — Dealers  in  stocks  and  other  commodities,  who 
endeavor  to  bear  down  or  diminish  the  prices. 

Bill. — A  statement  in  writing,  as  a  list  of  items  bought 
or  sold,  or  of  services  rendered.  The  common  term 
applied  to  a  note  or  draft. 

Bill  of  Exchange. — An  order  for  the  payment  of 
money,  usually  drawn  on  a  person  or  firm  located 
in  a  foreign  country,  the  term  draft  being  used  to 
designate  bills  that  are  payable  in  the  same  country 
in  which  they  are  drawn. 

Bill  of  Lading. — A  written  account  of  goods  shipped 
and  the  conditions  of  shipment,  having  the  signa- 
ture of  the  carrier's  agent,  and  given  to  the  shipper 
as  a  receipt 

Bill  of  Sale. — A  writing  given  by  the  seller  to  the 
buyer,  transferring  the  ownership  of  personal  prop- 
erty. 

Bills  Receivable. — Other  people's  notes  and  drafts 
due  us. 

Bills  Payable. — Our  notes  and  acceptances  due  to 
other  people. 

Board  of  Trade. — An  association  of  business  men  for 
the  regulation  and  advancement  of  commercial  in- 
terests. 

Bona  Fide. — In  good  faith. 

Bond. — A  written  instrument  under  seal,  by  which  the 
party  executing  the  bond  binds  himself  and  his 
heirs  to  the  fulfillment  of  certain  stipulations. 

Bonded  Cars. — Cars  containing  imported  goods  under 
seal,  on  which  the  duty  has  not  been  paid. 

Bonded  Goods. — Those  which  are  stored  in  a  bonded 
warehouse,  or  in  bonded  cars,  the  owner  having 
given  bonds  securing  the  payment  of  import  duties 
or  of  internal  revenues,  upon  their  removal  or  their 
arrival  at  some  inland  city  of  entry,  and  before  a 
specified  time. 

Bonded  Warehouses. — Warehouses  where  goods  are 
stored  under  bonds  securing  payment  of  duties  or 
revenues. 

Bonus. — A  premium  given  on  a  loan,  or  for  any  favor 
shown. 

Broker. — An  agent  who  effects  sales  or  purchases,  or 
who  makes  loans  and  contracts  for  another.  Also 
a  term  applied  to  one  who  deals  in  stocks.  A 
broker  does  not  usually  have  possession  of  the  prop- 
erty which  he  sells  or  buys  as  agent. 

Brokerage. — A  percentage  charged  by  a  broker  for 
transacting  business  for  another  person. 

Bullion. — Uncoined  gold  or  silver. 

Bulls.  —  Dealers  who  operate  to  raise  the  price  of  stocks 
or  other  commodities. 

Business, — Exchange  of  commodities  and  of  commer- 
cial values.  Also  a  term  representing  one's  occupa- 
tion. 

/'^APITAL. — The  investment  in  business. 

Cargo. — The  freight  of  a  vessel. 

Cashier. — The  officer  who  has  charge  of  the  finances  of 
any  business.     The  executive  officer  of  a  bank. 

Carrier. — One  who  conveys  goods  for  others. 

Certificate. — A  written  voucher  attesting  to  some  fact; 
as  a  certificate  of  deposit,  a  certificate  of  stock. 

Certified  Check.— One  which  has  been  certified  or  ac- 
cepted by  the  bank  on  which  it  is  drawn,  making 
the  bank  responsible  for  its  payment. 

Charter. — A  paper  from  government  defining  the  rights 
and  privileges  of  corporations.  To  hire  or  let  an 
instrument  of  transportation;  as  a  ship,  a  railway 
car. 

Chattel. — Any  kind  of  property  except  real  estate. 
Examples:  merchandise,  notes  and  accounts,  ani- 
mals, leases  of  real  estate,  etc. 


Check. — An  order  on  a  bank  drawn  by  a  depositor. 

Clearance. — A  custom  house  officer's  certificate,  show- 
ing that  a  vessel  has  been  cleared,  and  has  permit 
to  sail. 

Clearing  House. — The  place  where  banks  make  ex- 
change of  drafts  and  checks,  and  settle  balances. 

Codicil. — A  supplement  to  a  will. 

Coin. — A  piece  of  metal  impressed  with  the  government 
stamp,  and  used  as  money. 

Collaterals. — Pledges  of  stocks,  notes  or  chattels,  for 
security  on  loans  and  other  indebtedness. 

Commerce. — Exchange  of  commodities 

Commercial  Paper. — Bills  of  exchange,  drafts  and  notes 
given  in  the  course  of  trade. 

Commission.— A  percentage  given  for  the  sale  or  pur- 
chase of  goods,  or  the  transaction  of  other  business. 

Commodity. — A  term  relating  to  everything  movable 
that  is  bought  and  sold.  Examples:  goods,  wares, 
merchandise,  the  products  of  lands  and  manufact- 
ures. 

Common  Carrier. — One  who  for  pay  engages  to  trans- 
port goods  for  any  person  who  chooses  to  employ 
him. 

Common  Law. — Law  based  upon  the  precedent  of  usage, 
and  not  contained  in  the  statutes  enacted  by  legisla- 
tive bodies. 

Compact.— An  agreement  or  contract  between  parties. 

Company. — A  corporation.  A  term  used  in  a  firm  name 
to  designate  other  partners  whose  names  are  not 
given. 

Compromise. — To  settle  a  claim  by  paying  or  receiving 
only  a  part  of  the  amount.  To  agree  upon  a  settle- 
ment based  upon  mutual  concessions. 

Consideration — The  material  cause  of  a  contract.  The 
thing  promised,  cr  the  reason  for  the  promise. 

Consignee. — One  to  whom  goods  are  sent. 

Consignment. — Merchandise  consigned  to  an  agent  to 
be  sold. 

Consignor. — One  who  sends  or  consigns  the  merchan- 
dise. 

Consols. — The  chief  public  stock  of  England,  bearing 
3  per  cent  interest. 

Consul. — An  agent  for  a  government,  residing  at  a  sea- 
port in  a  foreign  country,  and  guarding  the  com- 
mercial interests  of  his  own  country. 

Contra. — On  the  opposite  side. 

Contraband. — Unlawful.  Articles  prohibited  from  be- 
ing bought  or  sold. 

Contract. — An  agreement  based  on  a  consideration,  to 
do  or  not  to  do  a  certain  thing. 

Copartnership. — The  joining  of  two  or  more  persons 
into  one  firm  for  the  purpose  of  carrying  on  any 
enterprise.  It  has  the  same  meaning  as  partner- 
ship. 

Copyright. — The  right  granted  by  government  to  an 
author  to  control  the  publication  of  any  book  or 
worJ<. 

Corporation. — A  number  of  persons  associated  togeth- 
er, composing  a  firm  for  conducting  any  enterprise 
specified  in  their  charter. 

Correspondence. — An  interchange  of  letters. 

Correspondents. — Banking  firms  and  collection  agen- 
cies with  whom  a  bank  has  accounts,  are  called  its 
correspondents. 

Counterfeit. — A.  spurious  bank  bill;  a  forgery. 

Countersign. — To  sign  as  a  subordinate  officer. 

Coupon. — An  interest  note  or  a  certificate  attached  to  a 
bond,  which  is  cut  off  from  the  bond  and  collected 
when  due. 

Coupon  Bonds. — Bonds  with  interest  coupons  attached. 

Covenant. — A  mutual  agreement  under  seal. 

Credentials. — Testimonials  giving  authority. 
Credit. — Trust  given  to  a  debtor.     Mercantile  reputa- 
tation  entitling  one   to  be  trusted.     The  side  of  an 
account  on  which  we  enter  all  values  received  from 
the  party  represented  by  the  title. 
Creditor. — One  giving  credit;  one  whom  we  owe. 


MERCANTILE  TERMS. 


133 


Currency. — Paper  money  as  distinguished  from  coin. 

In  a  broader  sense,   the  entire  volume  of  money  in 

circulation. 
Custom  House. — A  place  where  government  duties  are 

collected. 
Customs. — Taxes  or  duties  levied  by  government  upon 

goods  imported  or  exported. 

DAYS  OF  GRACE.— An  extension  of  time,  usually 
three  days,  after  a  written  obligation  becomes  due. 

Debit. — An  entry  on  the  debtor  side  of  an  account. 

Debt. — An  amount  due  from  one  to  another. 

Debtor. — One  owing  a  debt. 

Decimal. — That  which  increases  and  decreases  by  tens. 

Deed. — A  written  contract  under  seal,  usually  transfer- 
ring the  ownership  of  real  estate. 

Defalcation. — Deduction  or  discount.  Embezzlement 
of  money  by  an  officer  having  it  in  charge. 

Defaulter. — One  who  fails  to  account  for  money  and 
property  entrusted  to  him. 

Delivery. — The  passing  of  money  or  goods  to  another. 

Deposit. — To  commit  to  the  care  of  another;  especially 
to  place  money  in  bank  subject  to  our  order. 

Depositary.  —  One  to  whom  something  is  entrusted. 

Deputy. — A  person  appointed  to  act  for  another. 

Diplomacy. — The  art  of  conducting  negotiations  with 
foreign  governments. 

Discount  — An  allowance  for  payment  of  a  debt  before 
it  is  due.  A  sum  prepaid  as  interest  for  the  advance 
of  money.  To  buy  a  note  or  account  for  less  than 
its  full  amount. 

Dishonor.— A  failure  to  pay  an  obligation  when  due.  A 
failure  to  accept  a  draft  when  presented  for  accept- 
ance. 

Dividend. — The  portion  alloted  to  each  stockholder  in 
the  division  of  profits. 

Donor  — One  who  gives  or  bestows  a  gift. 

Dormant. — Referring  to  a  partner  who  takes  no  share  in 
the  public  management  of  a  business,  hence  not 
named  in  the  firm,  but  who  shares  in  the  gains  and 
losses. 

Dower. — The  right  of  a  widow  to  a  life  interest  in  one- 
third  of  all  the  real  estate  owned  by  her  husband  at 
any  time  after  their  marriage. 

Draft  — An  order  on  an  individual  or  a  firm  for  the  pay- 
ment of  money. 

Drawee. — One  to  whom  the  draft  is  directed. 

Drawer. — The  party  drawing  the  draft  and  ordering 
payment. 

Due-Bill. — A  brief,  written  acknowledgement  of  a  debt, 
having  the  effect  of  a  promissory  note. 

Duplicate. — An  exact  copy  of  anything. 

Duress. — Personal  restraint,  or  fear  of  personal  injury. 

Duties. — Taxes  levied  by  the  government  on  imports, 
and  sometimes  on  exports. 

EARNEST. — Part  of  purchase  money  paid,  or  part  of 
goods  delivered  to  bind  a  verbal  contract. 

Effects  — Property  of  any  kind. 

Embargo.— A  government  order  prohibiting  ships  from 
sailing  from  any  port. 

Embarrassment. — Financial  difficulty. 

Embezzlement. — A  fraudulent  appropriation  of  money 
entrusted  to  one's  care. 

Emporium. — A  commercial  center. 

Endorse,  or  Indorse. — To  write  one's  name  on  the 
back  of  a  commercial  paper.  To  receipt  a  partial 
payment  on  the  bacK  of  a  note  or  bill. 

Endorser,  or  IndOrser. — The  person  who  writes  his 
name  on  the  back  of  a  commercial  paper. 

Endorsement. — See  Indorsement. 

Engross. — To  copy  in  manuscript. 

Entry. — The  record  of  a  business  transaction  in  an  ac- 
count book. 

Equation. — The  process  of  equalizing  or  averaging. 

Equity. — The  science  of  right  and  justice,  whi'^h  often 
corrects  the  application  of  law  in  a  particular  case. 


Exchange. — The  giving  of  one  value  for  auother.  The 
process  of  remitting  money  values  by  means  of  bills 
and  drafts.  The  discount  or  premium  arising  from 
the  purchase  or  sale  of  different  classes  of  paper. 

Execution. — A  written  direction  given  to  an  officer,  au- 
thorizing him  to  enforce  a  judgment.  The  act  of 
signing  and  sealing  a  legal  iustrument. 

Executor. — One  appointed  by  will  to  settle  the  estate 
of  a  person  deceased. 

Exports  — ^Articles  sent  out  of  the  country. 

Extension. — An  agreement  between  debtor  and  creditor, 
postponing  the  time  of  payment  of  a  debt. 


FABRIC. — Any    manufactured  cloth;    as,    cotton    or 
woolen  fabrics. 
Face. — The  amount  expressed  on  a  bill  or  note. 
Factor. — An  agent  to  whom  goods  are  consigned   for 

sale. 
Fac  Simile. — An  exact  copy. 
Failure. — The  act  of  becoming  insolvent. 
Favor. — A  complimentary   term  applied  to  a  letter  re- 
ceived.    A  note  or  bill  is  said  to  be  in  favor  of  the 

payee. 
Fee  Simple. — The  absolute  ownership  of  real  estate. 
Finance. — The  revenue  of  a  state.     Public  money. 
Financier. — One  having  charge  of  the  public  revenues. 

One  skilled  in  money  matters. 
Firm. — A  general  title  of  partnership,  or  of  a  business 

house. 
Fiscal. — Pertaining  to  the  public  treasury  or  revenue. 

As,    the  fiscal   year,   meaning  the  financial  year  as 

reckoned  by  the  department  of  finance. 
Fixtures. — The  furnishings  of  a  store  or  office  that  are 

not  movable. 
Flat. — A  term  applied  to  stocks  that  are  dull  of  sale. 
F.  O.  B. — Free   on  Board.     A   term    used  on  invoice? 

and  price  lists,   indicating  that  the  merchandise  is 

delivered    to    the    carrier    for    shipment,     without 

charges  for  cartage  or  boxing. 
Folio. — The  page  of  an  account  book. 
Footing.— The  amount  of  a  column  of  figures. 
Forced  Sales. — Sales  of  goods  under  price  because  of 

business  necessity. 
Foreclosure. — A  process  by  which  mortgaged  property 

is  sold  by  the  mortgagee  in  order  to  pay  the  debt 

secured. 
Forgery. — The  act  of  fraudulently  writing  or  altering  a 

written  document. 
Fraud. — Deception  practiced  for  the  purpose  of  gaining 

an  unfair  advantage. 
Free  Goods. — Goods  admitted  to  a  country  free  of  duty. 
Free  Trade. — Commerce  between  nations  unrestricted 

by  duties  or  tariff  regulations. 
Freight. — Merchandise  being  transjxjrted.     The  price 

paid  for  transportation. 
Fund. — A  sum  of  money  set  aside  for  a  special  purpose. 
Funded. — Turned  into  a  permanent  debt  or  loan. 
Funds. — Ready  money. 


GAUGING. — The  process  of  measuring  the  comencs 
of  casks. 

Goods. — A  term  synonomous  with]merchandise,  chattels, 
commodities. 

Good  Will. — The  reputation  and  patronage  that  per- 
tains to  an  established  business. 

Grace. — Favor.     See  Days  of  Grace. 

Gratuity. — A  free  gift. 

Greenbacks. — United  States  notes,  as  distinct  from  na- 
tional bank  notes. 

Gross  Weight. — Weight  of  merchandise  including  the 
case  or  wrapping. 

Guarantee,  or  Guaranty. — A  surety  for  the  perform- 
ance of  a  contract,  in  case  the  party  making  the 
contract  fails  to  keep  it.     A  sec-  ity  against  loss. 


134 


MERCANTILE  TERMS. 


HIGHWAY. — A  road  which  every  one  has  the  right  to 
use. 
Honor. — To  accept  a  draft,  or  to  pay  it  when  due. 
House. — Another  word  for  firm. 


IMPORT. — To  bring  from  a  foreign  country.  The  ar- 
ticle brought. 

Indemnify. — To  make  good  for  injury  or  loss. 

Indemnity. — A  guarantee  against  loss  or  damage. 

Indenture. — A  mutual  agreement  in  writing  between 
two  or  more  parties. 

Indorse. — See  Endorse. 

Indorsement. — A  writing  on  the  back  of  any  commercial 
paper. 

Infringement. — To  trespass  upon  the  rights  of  another, 
especially  when  granted  some  special  right  by  law, 
such  as  a  copyright,  a  patent,  or  a  trade  mark. 

Injunction. — A  writ  or  process  by  which  a  party  is  re- 
quired to  do  or  to  refrain  from  doing  a  special  act. 

Insolvency. — Being  unable  to  pay  all  debts;  usually, 
synonomous  with  bankruptcy. 

Installment.— Part  of  a  sum  of  money  paid  or  to  be 
paid. 

Instant. — Referring  to  the  present  month;  as,  the  sixth 
instant  means  the  sixth  day  of  the  present  or  cur- 
rent month. 

Insurance. — A  contract  to  indemnify  one  in  case  of  loss. 

Internal  Revenue. — That  part  of  our  government  rev- 
enue which   is  collected  as  internal  duties  or  taxes. 

Interest. — A  certain  percentage  paid  by  the  debtor  to 
the  creditor  for  the  use  of  money.  A  share  in  any 
business. 

Intestate. — Dying  without  having  made  a  will. 

Inventory. — An  itemized  list  of  goods  with  their  prices 
and  amount. 

Investment. — The  laying  out  of  money  in  the  purchase 
of  property. 

Invoice. — An  itemized  bill  of  merchandise  bought,  sold 
or  shipped. 


JOBBER. — One  who  buys  from  importers  and  manu- 
facturers, and  sells  to  retailers. 

Job  Lots. — Remnants  and  broken  assortments  of  mer- 
chandise sold  in  lots  under  regular  prices. 

Joint  Stock. — Property  held  in  common  by  a  company 
of  men,  each  of  whom  is  called  a  stockholder. 

Journal. — A  book  used  to  prepare  entries  for  the  ledger. 

Journalizing. — Entering  records  in  the  journal. 

Judgment. — The  decree  of  a  court  enforcing  a  contract 
or  redressing  a  wrong. 

Junior  Partner. — The  youngest  member  of  a  firm. 

LANDLORD. — One  who  owns  real  estate  and  leases  it 
to  another. 

Larceny. — The  taking  of  personal  property  unlawfully. 
Theft. 

Lease. — The  letting  of  land  and  other  property  for  hire. 
The  contract  for  such  letting,  usually  written,  but 
sometimes  verbal. 

Ledger. — The  book  of  accounts  to  which  all  of  the 
records  are  finally  carried 

Legacy. — A  gift  of  property  by  will. 

Legal  Tender. — That  kind  of  money  which  legally  can 
be  offered  in  payment  of  a  debt. 

Letter  of  Credit. — A  letter,  usually  addressed  to  bank- 
ing houses  in  foreign  cities,  authorizing  the  holder 
to  receive  credit  for  a  stated  amount. 

Liability. — Any  debt  owed  by  a  person. 

License.  —  A  legal  permit  to  do  a  certain  thing. 

Lien.  —  A  legal  claim  on  any  class  of  property  to  secure 
payment  of  a  debt. 

Liquidate — To  pay  or  settle  a  claim. 

Loan. — To  lend  to  another  for  temporary  use.  The  ar- 
ticle lent. 


M 


AKER. — The  signer  of  a  note. 


Manifest. — A  list  of  the  articles  in  a  vessel's  cargo. 

Manufacture. — The  process  of  changing  raw  materials 
into  forms  suitable  for  use. 

Marine. — Pertaining  to  the  ocean;  hence,  to  navigation. 

Maturity. — The  date  when  commercial' paper  becomes 
payable. 

Merchandise.^ — Wares,  goods,  commodities  bought  and 
sold  in  trade. 

Mercantile  Agency. — An  agency  established  to  collect 
and  disseminate  information  relative  to  the  financial 
standing  of  business  men. 

Mercantile  Paper. — Notes  and  drafts  of  business  men. 

Mint. — A  place  established  by  the  government  for  the 
purpose  of  coining  money. 

Monetary. — Pertaining  to  money. 

Money. — Any  coin  or  currency  lawfully  employed  as  a 
representative  of  value  in  buying  and  selling. 

Monopoly. — The  sole  right  to  make  or  sell  a  certain  ar- 
ticle.    The  exclusive  control  of  anything. 

Mortgage. — The  written  pledge  of  real  estate  or  chattels 
to  secure  payment  of  a  debt. 

Mortgagee. — One  to  whom  a  mortgage  is  given. 

Mortgager,  or  Mortgageor. — One  who  gives  the  mort- 
gage. 

NEGOTIABLE.— A  term  applying  to  commercial  pa- 
per, that  may  be  transferred  by  endorsement,  or 
simply  by  delivery. 

Negotiate. — To  transact  business,  or  treat  with  another. 

Net. — Clear  of  all  charges.  The  exact  weight  or  amount 
after  all  deductions  are  counted  out. 

Net  Proceeds. — The  proceeds  of  a  sale  after  all  ex- 
penses are  deducted. 

Notary,  or  Notary  Public. — An  officer  who  acknowl- 
edges deeds  and  other  commercial  papers;  but 
whose  chief  business  is  to  protest  paper  for  non-ac- 
ceptance and  non-payment. 

Note. — A  written  or  printed  promise  to  pay,  without  seal. 

OPEN  ACCOUNT, — An  unsettled  account  with  a  per- 
son or  a  firm. 

Open  Policy. — One  intended  to  cover  all  goods  shipped 
by  a  person  within  a  specified  time;  each  special  ship- 
ment and  the  amounts  of  insurance  to  be  indorsed 
upon  the  policy,  as  the  shipments  are  made. 

Option. — The  privilege  of  taking  or  delivering,  that  is, 
buying  or  selling  a  certain  amount  of  any  specified 
property  at  a  given  price. 

Outlawed. — A  term  applied  to  a  debt  which  has  run  be- 
yond the  time  when  the  law  will  enforce  its  pay- 
ment. 

Outstanding. — Referring  to  debts  or  liabilities  unpaid. 

Overdraw. — To  draw  a  greater  sum  than  one  has  to  his 
credit. 

Overdue. — A  term  referring  to  a  note  or  other  obligation 
that  remains  unpaid  after  it  is  due. 

Owe. — To  be  indebted. 

PAR. — Equal  in  value.  Any  paper  is  at  par  when  it  is 
worth  its  face  value,  without  premium  or  discount. 

Parol. — Oral,  not  written.  Also  applied  to  written  con- 
tracts not  under  seal. 

Partner. — An   associate   in  any  business  or  occupation. 

Partnership.— The  association  together  of  two  or  more 
persons  for  the  purpose  of  conducting  any  business. 

Par  Value.— The  nominal  value;  usually  the  printed  or 
written  value  of  any  paper. 

Pass-Book.— A  book  in  which  a  trader  enters  articles 
bought  on  credit.  It  is  usually  carried  by  the  pur- 
chaser, and  is  presented  for  record  when  the  piac- 
chases  are  made. 

Patent. — An 'official  document  securing  to  a  person  for 
a  term  of  years,  the  exclusive  right  to  an  invention. 


MERCANTILE  TERMS. 


135 


Pav       — A  deposit  or  pledge,  given  as  security  for  a  loan, 
e  term  only  applies  to  chattels  or  money,  and  not 
to  real  estate. 
Pawnbroker. — One   who    lends  money    on    pawns    or 

pledges. 
Pay. — To  discharge  a  debtior  obligation.     An  equivalent 
for  goods,  salary,  or  wages. 

Payee. — The  one  to  whom  payment  is  to  be  made; 
especially  in  whose  favor  a  paper  is  drawn. 

Payer. — The  one  who  pays,  or  is  under  obligations  to 
pay. 

Personal  Property. — All  property  except  real  estate; 
chattels. 

Plaintiff. — One  who  brings  a  personal  action  in  law 
against  another  party,  who  is  called   the  defendant. 

Pledge. — The  delivery  of  personal  property  as  security 
for  a  debt. 

Policy. — A  written  contract  of  insurance. 

Politic. — Prudent,  sagacious.  In  a  broader  sense,  for 
the  public  good. 

Posting. — Transferring  debits  and  credits  to  the  ledger. 

Power  of  Attorney. — A'  written  instrument  giving  an 
agent  authority  to  act  for  his  principal.     An  agent 
■  thus  empowered  is  called  an  Attorney  in  Fact. 

Preferred  Stock. — Stock  taking  preference  over  the  or- 
dinary stock  of  a  corporation.  A  dividend  is  de- 
clared and  paid  on  preferred  stock  before  any  can 
be  declared  on  common  stock. 

Premises. — A  term  applied  to  any  piece  of  real  estate,  or 
to  a  building  and  its  appurtenances. 

Premium. — The  amount  paid  for  insurance.  The  excess 
of  any  value  above  par. 

Price. — The  value  of  an  article.  The  amount  paid  or 
demanded  for  any  commodity  in  trade. 

Price  Current. — A  table  of  the  market  values  of  various 
commodities. 

Prima  Facie. — At  first  view.  Prima  facie  evidence  is 
that  evidence  which  is  sufficient  unless  rebutted. 

Principal. — The  one  employing  an  agent  to  act  for  him. 
The  sum  loaned  upon  which  interest  is  computed. 

Promissory  Note. — A  written  promise  to  pay  a  certain 
sum  of  money  unconditionally,  at  a  specified  time. 

Pro  Rata. — A  proportional  distribution. 

Protective  Tariff. — Rates  of  duty  fixed  on  certain  im- 
ported commodities,  for  the  protection  of  home 
manufacturers. 

Protest. — A  formal  declaration  made  by  a  notary  pub- 
lic, of  the  non-payment  of  a  note,  or  non-accept- 
ance and  non-payment  of  a  draft. 

QUARANTINE. — Restraint  of  intercourse    to  which 
a  ship,  dwelling  or  town  is  subjected,   on  account 
'of  being  infected  with  some  contagious  disease. 
QucfATiONS. — The   published    prices    of  merchandise, 
rates  of  freight,  rates  of  exchange,  etc. 


R 


ATE. — The  price  or  value. 


Ratify. — To  sanction  or  approve;  usually  applied  to  a 
principal's  approval  of  an  agent's  transactions. 

Real  Estate. — Land,  and  everything  that  legally' passes 
with  it  in  a  conveyance  or  sale. 

Rebate. — Deduction  from  the  price.     Discount. 

Receipt. — A  wiitten  acknowledgment  of  having  re- 
ceived money  or  other  property. 

Receiver. — A  person  appointed  to  take  charge  of  the  af- 
fairs of  a  corporation  on  its  dissolution,  and  to  dis- 
tribute its  property  according  to  law. 

Refund. — To  repay  or  to  pay  back. 

Remittance. — The  act  of  transmitting  money  values 
from  one  place  to  another.  The  value  sent  is  called 
a  remittance. 

Renewal. — As  applied  to  commercial  paper,  to  give  a 
new  note  or  bill  on  which  the  time  of  payment  is 
extended,  for  a  paper  now  due. 

I^ENT. — Money  or  goods  given  by  a  tenant  to  his  land- 
lord, to  pay  for  the  use  of  property. 


Responsible. — Liable.  Having  sufficient  property  to 
meet  all  ordinary  obligations. 

Resources. — Money,  property,  or  that  which  can  be 
converted  into  property;  as,  claims  against  other 
people,  either  on  written  or  verbal  promises. 

Retail. — To  sell  in  small  quantities. 

Revenue. — The  income  of  individual  or  nation.  As  ap- 
plied to  a  nation,  its  receipts  into  the  treasury,  de- 
rived from  taxes,  duties,  customs,  etc. 

Revocation. — The  recall  of  authority  conferred  on  an- 
other; as,  the  revocation  of  an  agency. 

Right  of  Way. — The  right  of  an  individual  or  corpora- 
tion to  pass  over  the  land  belonging  to  another  per- 
son. 

SALE. — The  transfer  of  property  from  one  person  to 
another,  for  a  price. 
Salvage. — An  allowance  made  by  law  to  those  who  save 

a  ship's  cargo  from  a  wreck  or  fire. 
Sample.— A  specimen  of  any  commodity. 
Schedule. — A  paper  containing  a  list  or  inventory  of 

items. 
Security. — An  evidence  of  debt;  as,  a  government  bond. 
A   pledge   given   or   something  deposited  to  make 
good  a  contract.     A  person  who  becomes  surety  for 
another. 
Set-off. — A  counter  claim.     A  claim  which  the  debtor 
or  defendant  brings  to  reduce  the  claim  of  a  creditor 
or  plaintiff. 
Settle. — To  adjust  or  close  up  an  account. 
Shareholder. — The  same  as  stockholder. 
Shipment. — Merchandise  shipped.     The   act   of   trans- 
porting merchandise. 
Shipper. — One    who  leaves   merchandise  with   another 

for  transportation. 
Sight. — The  time  of  presenting  a  draft  or  bill  to  the 

drawee. 
Sight  Draft. — A  draft  made  payable  at  sight. 
Signature. — The  name  of  a  person  written  with  his  own 

hand. 
Silent  Partner. — A  partner  investing  in  the  business, 

but  not  publicly  named  in  the  firm. 
Sinking  Fund. — A  fund  set  aside  for  sinking  or  paying 

the  debts  of  the  government,  or  of  a  corporation. 
Solvent. — Being  able  to  pay  one's  liabilities. 
Staples. — Articles  commonly  used;  as,  staple  dry  goods 

and  groceries. 
Statement. — A  list  of  resources  and  liabilities.  A  re- 
port of  an  agent's  transactions  sent  to  his  principal. 
An  itemized  list  of  the  debits  and  credits  of  any 
personal  account;  as,  monthly  statements  sent  by 
wholesale  dealers  to  their  customers. 
Statistics. — A  collection  of  facts  pertaining  to  any  one 

subject. 
Statute. — A  law  enacted  by  a  legislature. 
Stipulation. — A  contract  or  an  agreement. 
Stock  Exchange. — A  place  where  bankers  and  brokers 

meet  to  buy  and  sell  stocks,  bonds,  etc. 
Stockholder. — One   who  owns   shares  of   the  capital 

stock  of  a  corporation. 
Stock.— Shares  in   the  stock  of  any   corporation;  also, 

railroad  or  government  securities. 
Sub-Agent. ^ — An  agent  appointed  by  an  agent. 
Sue. — To  bring  an  action  against  one  in  law. 
Surety. — A  person  who  has  made  himself  responsible 

for  the  contract  of  another. 
Suspend. — To  stop  payment. 

Syndicate. — A  number  of  capitalists  who  unite  together 
to  dispose  of  a  large  loan,  or  to  conduct  some  great 
financial  enterprise. 


T 


ACIT. — That  which  is  understood  or  implied. 


Tare. — An  allowance  madeifor  the  weight  of  boxes,  ba-.- 
rels,  or  wrappings  of  merchandise.     The  remainder 
after  deducting  the  tare  is  called  net  weight. 


MERCANTILE   TERMS. 


Tariff. — A  list  of  prices;  as,  a  freight  tariff.  A  list  of 
duties  or  customs  on  imports  or  exports. 

Teller. — One  who  receives  or  counts.  A  bank  officer 
who  receives  or  pays  out  money. 

Tender. — The  offer  of  payment  or  satisfaction  of  a  de- 
mand, usually  the  offer  of  legal  money,  called  a 
legal  tender,  for  the  payment  of  a  debt. 

Tenement. — Any  real  estate  leased  to  a  tenant.  Applied 
especially  to  houses  built  for  rent. 

Testator. — A  person  who  has  made  a  will. 

Tickler. — A  book  containing  a  memorandum  of  notes 
and  debts,  arranged  in  the  order  of  their  maturity. 

Time  Draft. — A  draft  made  payable  at  a  specified  time; 
usually  a  certain  period  after  date,  or  after  sight. 

Trade  Discount. — A  discount  from  certain  list  prices, 
or  from  the  amount  of  purchases,  made  to  a  dealer 
on  account  of  a  change  in  the  prices,  or  on  account 
of  cash  payments. 

Trade  Mark. — A  device  placed  upon  manufactured 
goods  to  distinguish  them  from  imitations. 

Tran.sfer. — A  conveyance  of  property. 

Trust. — The  holding  of  property  by  one  for  the  benefit 
of  another.     To  give  credit  to  one. 

Trustee. — A  person  to  whom  property  is  legally  en- 
trusted. 


u 


LTIMO. — The  last  month  preceding  the  present;  as, 
on  the  twentietl^  ultimo,  meaning  the  twentieth  of 
last  month. 


Uncurrent. — A  term  applied  to  money  that  does  not 
pass  in  common  payment.  Foreign  coins  are  un- 
current in  the  United  States. 

Underwiters. — Companies  who  insure  against  loss. 

Usuance. — The  time  usually  allowed  in  a  particular 
country  or  city,  for  the  payment  of  a  bill  of  ex- 
change. 

Usury. — Interest  in  excess  of  the  highest  rate  allowed 
by  law. 


VALID. — A  term  applied  to  a  contract  that  is  properly 
executed;  that  is,  legal  or  binding. 
Void. — Having  no  legal  or  binding  force. 
Voidable. — Capable  of  being  avoided  or  confirmed,  as 

the  party  chooses. 
Voucher. — A   document   or   paper   proving  that   some 
transaction  occurred;   as,   a  receipt  or  a  cancelled 
note  is  a  voucher  for  the  payment  of  money. 

WARRANT. — To  insure  against  defects.     Authority 
given  to  an  officer  to  arrest  a  person.     A  writing 
authorizing  the  holder  to  receive  money. 
Warranty. — An  agreement  to   become  responsible,    if 

certain  facts  do  not  turn  out  as  represented. 
Way-Bill.- — A  paper  containing  a  list  and  description  of 

goods  sent  by  railroad. 
Wholesale. — To  sell  goods  in  quantity;  usually,  in  un- 
broken or  whole  packages. 


ABBREVIATIONS. 


A  I First  Quality 

@ --     At 

Acct Account 

Adv -  -  Adventure 

Agt ...Agent 

Amt Amount 

Ans Answer 

Apr . April 

Art Article 

Asstd Assorted 

Aug August 

Bal -- .Balance 

Bbl Barrel 

B  B Bill  Book 

Bdls Bundles 

Bds.   Boards 

Bgs Bags 

Bk Bank 

Blk Black 

Bis Bales 

Bot Bought 

B.  Pay Bills  Payable 

B.  Rec Bills  Receivable 

Bro ..Brown 

Brot Brought 

Bu... Bushel 

C Hundred 

Cap • Capital 

C.  B Cash  Book 

Chgd. ..Charged 

Ck ...-. ...Check 

j  County 

^°-  - \  Company 

C  O.  D.  Collect  on  Delivery 

Col Collection 

Com.. Commission 

Const Consignment 


Or Creditor 

Cts. Cents 

Cs Cases 

Cwt Hundredweight 

D.  B Day  Book 

Dec December 

Dep Deposit 

Dft. Draft 

Dis Discount 

Do ..(Ditto)  The  Same 

Doz Dozen 

Dr Debtor 

Ds. Days 

Ea - Each 

E.  E Errors  Excepted 

Embd. Embroidered 

Eng English 

Ex Example 

Exch. Exchange 

Exp.. Expense 

Fav Favor 

Feb February 

Figd Figured 

F.,  or  Fol. Folio 

Ford Forward 

Frt Freight 

Ft Foot  or  Feet 

Gal .Gallon 

Gdn Guardian 

Gro Gross 

Hdkf. .Handkerchief 

Hhd Hogshead 

Hund. -  Hundred 


I.  B Invoice  Book 

i.  e \'    «/)  That  is 

In .Inches 

Ins insurance 

Inst Instant 

Int .-  Interest 

Inv ....  Invoice 

Invt. Inventory 

Jan January 

J Journal 

J.  F ' Journal  Folio 

lbs Pounds 

L.  F _  Ledger  Folio 

M Thousand 

Mar March 

Mdse Merchandise 

Mem Memorandum 

Messrs.  ..Gentlemen  or  Sirs 

Mftg Manufacturing 

Mo Month 

Mr Mister 

Mrs. Mistress 

Nat National 

N.  B Take  Notice 

No Number 

Nov November 

Oct. October 

oz Ounce 

P Page 

Payt Payment 

Pd ...Paid 

Per By 

Pkg. Package 


P.  O Post  Office 

Pr Pair 

Prem. Premium 

Prox Proximo 

Pc Piece 

Ps Pieces 

Pt Pint 

Qr Quarter 

Qt Quart 

Reed Received 

R.  R Rail  Road 

S.  B... Sales  Book 

Sec Secretary 

Sept September 

Shipt Shipment 

St Street 

Sunds. Sundries 

Super Superfine 

T Ton 

T,  \  Transportation 

Trans. ■<        ta  *^ 

I       Transaction 

Ult Ultimo 

Via. By  way  of 

Viz Namely 

Vs {^ersus)  Against 

W.  B Way  Bill 

Wk. Week 

Wt Weight 

Yds Yards 

Yr.... ...Year 


H igher   Accounting. 


The  Essentials  of  Bookkeeping  present  the 
principles  and  forms  of  stand- 
ard accounting. 


The  following  chapters  will  present  modifications  of  these  forms,  introducing  a  larger  number 

and  a  greater  variety  of  account  books,  and    a   more  complete  classification   of 

accounts  as  required   in    Corporation    Bookkeeping,    Manufacturing, 

Commission,   Keeping  Abstracts  of  Title,   Real   Estate 

and    Insurance,  and    Practical    Banking. 


138  HIGHER  ACCOUNTING. 


Set  Eight. 


PARTNEF.SHIP  SETTLEMENTS. 


GELNERAL  PRINCIPLES  OF  PARTNERSHIP. 


Each  partner  should  have  credit  for  all  amounts  he  contributes  to  the  firm  capital,  for  all 
amounts  he  pays  out  for  the  benefit  of  the  firm,  and  for  his  share  of  the  net  gain  of  the  firm  ; 
and  he  should  be  debited  for  all  obligations  assumed  by  the  firm  for  him.  for  all  amounts  with- 
drawn by  him,  and  for  his  share  of  the  net  loss  of  the  firm. 

If  the  gain  or  loss  is  to  be  divided  in  proportion  to  the  amounts  invested,  each  partner 
should  have  such  a  part  of  the  gain  or  loss  as  his  investment  is  part  of  the  whole  capital. 

If  the  partners'  investments  are  for  different  periods  of  time,  they  can  be  compared  by 
reducing  them  to  equivalents  for  the  same  length  of  time. 

When  we  consider  the  partners'  investments  as  the  capital  of  the  firm,  the  amounts  drawn 
out  by  the  partners,  unless  for  salaries  or  interest,  should  be  counted  as  due  from  the  partners 
on  private  account,  making  such  amounts  resources  of  the  firm  in  estimating  the  net  worth 
and  gain  or  loss.  The  balance  of  salaries  or  interest  on  capital  unpaid  to  partners,  should  be 
counted  among  the  liabilities  of  the  firm  in  estimating  its  net  worth  and  gain  or  loss.  After 
finding  the  gain  or  loss  of  each  partner,  the  investment  account,  the  private  account,  and  the 
gain  or  loss  of  each  partner,  should  be  combined  to  show  his  net  worth. 

PROBLEMS  IN  PARTNERSHIP. 

The  following  examples  are  to  be  written  in  the  form  of  statements,  either  at  the  black- 
board or  on  practice  paper,  or  both,  as  the  teacher  may  direct. 

1 

A,  B  and  C  form  a  partnership  for  the  purpose  of  buying  and  selling  wood  and  coal.  A 
invests  ;^2,ooo,  B  invests  ;^3,ooo,  C  invests  ;$2,500.  At  the  end  of  the  year  their  net  worth  is 
;^io,500.     What  is  each  partner  worth  after  distributing  the  gains  according  to  investment? 

2 

D  invests  cash  ;^9,ooo,  E  invests  cash  ;$6,ooo.  and  F  invests  cash  ;^5,ooo  in  the  lumber 
business,  with  the  understanding  that  the  gains  and  losses  are  to  be  shared  according  to  invest- 
ment. They  pay  cash  ^i  8,000  for  sundry  bills  of  lumber.  Their  sales  amount  to  $24,000,  of 
which  they  receive  cash  ^12,000,  notes  ^S/.OOO,  the  remainder  being  charged  on  account  to 
various  persons.  Twenty-five  per  cent  of  the  amount  charged  on  account  is  considered  worth- 
less. The  balance  of  their  lumber  on  hand  is  destroyed  by  fire.  They  pay  $T^o  for  expenses. 
What  is  the  present  worth  of  each  partner? 

3 

G  and  H  engage  as  partners  in  buying  and  shipping  stock,  sharing  gains  and  losses 
equally.  G  pays  $8,750  for  sheep  and  $750  for  freight,  shipping  them  to  H.  H  sells  the 
sheep  for  $  I  1,250,  paying  for  their  expenses  previous  to  sale  $250.  H  sends  $5,000  of  the 
money  to  G.  H  pays  $4,675  for  cattle  and  $825  for  freight  and  other  expenses,  shipping  them 
to  G,  who  sells  them  for  $5,280,  paying  for  their  feed  $215,  for  help  $65.  How  shall  the  part- 
ners settle  with  each  other? 


PARTNERSHIP  SETTLEMENTS^  139 


I,  J,  and  K  each  invest  in  business  $2,500,  sliaring  equally  in  gains  and  losses.  During  a 
period  of  two  years  they  draw  out  the  following  amounts  :  I  $4,926,  J  $4,200.  K  $3,974.  At 
the  close  of  the  second  year  the  business  is  settled  up  and  there  is  just  money  enough  to  pay 
their  debts,  leaving  neither  resources  nor  liabilities  except  the  three  partners'"  accounts.  How 
much  have  they  gained  and  how  shall  they  make  settlement? 

5 

L,  M,  and  N  enter  into  partnership;  L  and  M  investing  $3,000  each,  and  N  making  no 
investment,  but  devoting  his  time  to  the  business.  'iPhe  three  partners  are  to  share  equally  in 
the  gains  and  losses.  During  the  year  L  draws  out  $750,  M  draws  out  $650,  and  N  $400. 
Their  resources,  exclusive  of  the  partners'  accounts,  amount  to  $8,550,  and  their  liabilities  to 
$3,000.     What  is  each  partner  worth  at  the  end  of  the  year? 

6 

O,  P,  and  Q  are  partners  commencing  business  without  capital.  O  is  to  receive  two-fifths 
of  the  gain  or  loss,  P  one-third,  and  Q  the  remainder.  During  the  year  O  is  debited  for  money 
drawn  out  $950,  P  is  debited  $800,  and  Q  $750.  At  the  end  of  the  year  they  have  cash  on 
hand  $500,  personal  accounts  due  them  $375,  and  office  furniture  $225.  They  owe  on  their 
notes  $1650,  on  personal  accounts  $550.     What  is  each  partner's  gain  and  net  insolvency? 

7 

Two  students,  R  and  S,  enter  into  partnership  for  the  purpose  of  boarding  themselves 
three  months.  R  pays  the  first  month's  rent  $5,  S  furnishes  provisions  valued  at  $6  and  pays 
$13.50  for  furniture.  During  the  second  month  R  furnishes  provisions  valued  at  $6.50,  and 
through  his  own  carelessness  he  breaks  a  lamp  worth  50  cents.  The  firm  decide  to  buy  a 
better  lamp,  and  R  pays  $1  ior  it,  one-half  of  which  amount  is  to  be  charged  to  the  firm's 
expenses.  S  pays  the  rent  $5,  and  for  additional  furniture  $2.50.  During  the  third  month  R 
pays  the  rent  $5,  and  lends  S  cash  $6.25.  S  furnishes  provisions  valued  at  $7  and  brings  a 
statement  of  wood  furnished  for  the  three  months  to  the  amount  of  $12.  At  the  close  of  three 
months  R  leaves  school  and  .S  continues  in  the  room,  retaining  the  furniture  and  the  balance 
of  the  provisions  and  wood.  They  estimate  the  furniture  worth  now  two-thirds  what  it  cost 
the  firm,  and  the  balance  of  wood  and  provisions  worth  $2.75.  How  shall  they  settle  their 
accounts  ? 

8 

H  and  I  each  invest  $r 0,000  in  business.  At  the  end  of  three  months  H  draws  out  $1 ,000 
and  I  invests  $1,000.  At  the  end  of  nine  months  PI  invests  $3,000  and  I  draws  out  $3,000. 
The  investments  remain  unchanged  during  the  remaining  three  months.  The  firm's  net  gain 
for  the  year  is  $3,600.  What  is  each  partner's  present  worth,  after  dividing  and  crediting  the 
gain  according  to  the  average  investments? 

9 

J  and  K  enter  into  partnership.  J  investing  $8,000,  on  which  he  is  to  receive  seven  per 
cent  interest.  K  makes  no  investment  except  his  time,  for  which  he  is  to  receive  a  salary  of 
$1,000  for  managing  the  business.  During  the  year  K  draws  on  his  salary  $900.  At  the  end 
of  the  year  the  property  of  the  firm  is  worth  $18,000,  on  which  they  owe  $3,000,  besides  a 
year's  interest  on  J's  investment  and  $100  of  K's  salary.  If  each  oartner  receives  credit  for 
one-half  of  the  net  gain,  what  is  each  partner's  interest  at  the  end  of  the  year  ? 

10 

L  and  M  are  partners  who  are  to  share  equally  in  gains  and  losses.  L  invests  $3,000  Jan. 
T,  1895.  M  invests  $2,500  Feb.  i,  1895.  Each  partner  is  to  receive  interest  at  6  per  cent 
per  annum  on  his  capital  invested.  On  June  1,  1895,  L  dr  iws  out  $500  and  M  invests  $1,500. 
On  Sept.  I.  1895,  L  invests  $1,000  and  M  draws  out  $500.  On  Jan.  i.  1896,  their  books 
and  inventory  show  resources  amounting  to  $18,300,  and  liabilities  amounting  to  $4,000,  be- 
sides the  interest  due  to  the  partners.  What  is  each  partner's  net  worth  after  receiving  credit 
for  interest  on  his  investment  and  for  his  share  of  the  net  gain  ? 


140  HIGHER  ACCOUNTING. 


Set  Nine. 


BOOKKEE^PING  FOF^  CORPOF^ATIONS. 


The  advantages  pertaining  to  a  corporation  are  so  well  known  that  it  would  be  useless  for 
us  to  take  time  and  space  to  dwell  upon  them.  But  their  relation  to  the  subject  of  accounts 
claims  our  attention  at  least  for  a  brief  chapter. 

The  process  of  forming  a  corporation  is  defined  by  the  statutes  of  each  state,  these  differing 
in  some  of  the  minor  details,  so  that  a  company  who  wish  to  form  a  corporation  in  any  state 
must  consult  carefully  the  laws  of  that  state  and  govern  themselves  accordingly. 

The  first  step  in  forming  a  corporation  is  to  open  a  subscription  list,  in  which  the  proposed 
incorporators  sign  an  agreement  binding  themselves  to  become  responsible  for  the  amount  of 
stock  for  which  they  subscribe.  Usually  the  subscribers  appear  before  a  notary  public  and 
acknowledge  their  subscription  and  their  signature  to  be  their  voluntary  act. 

The  proposed  incorporators  then  draw  up  articles  of  incorporation,  very  much  like  the 
constitution  of  a  society,  giving  the  name,  object,  amount  of  capital,  officers  and  method  of 
management,  and  such  restrictions  and  limitations  as  they  desire.  These  articles  are  recorded 
in  their  own  county,  and  also  at  the  capital  of  their  state,  after  which  a  charter,  or  authority 
to  transact  business,  is  issued  by  the  state  department.  Certain  kinds  of  corporations  require 
a  charter  to  be  granted  by  special  act  of  the  legislature  of  the  state. 

If  the  capital  is  not  all  to  be  paid  in  at  one  time,  the  directors,  who  are  elected  by  the 
stockholders,  call  for  an  installment  of  the  subscribed  capital  to  be  paid  in,  and  as  the  business 
develops  and  requires  more  capital,  other  installments  are  called  for,  until  the  entire  capital 
subscribed  is  paid  up. 

Two  of  the  principal  advantages  of  corporations  are  that  men  can  thus  mass  together 
more  capital  than  they  can  individually,  and  that  the  stockholders  are  only  liable  for  the 
amount  of  capital  they  have  subscribed  in  case  the  business  proves  adverse.  This  enables 
them  to  undertake  large  enterprises  with  much  less  risk  than  they  could  as  individuals  or 
partners. 

After  the  installment  list  is  made  out,  and  the  stockholders  pay  their  installments,  they 
each  receive  a  receipt  signed  by  the  president  and  secretary  of  the  corporation.  This  is 
called  an  Installment  Scrip,  and  these  are  issued  for  each  installment  paid  in,  until  the  entire 
stock  subscribed  is  paid  in,  when  these  receipts  are  returned  to  the  officers,  who  issue  in  their 
stead  regular  Certificates  of  Stock. 

Another  method  is  to  have  the  certificates  of  stock  printed  so  that  they  will  show  the  per 
cent  that  has  been  paid  in.  If  a  first  installment  of  fifty  per  cent  has  been  paid  and  a  cer- 
tificate granted  for  it,  when  the  next  installment  of  twenty-five  per  cent  is  paid  the  former, 
certificate  is  surrendered,  arid  a  new  one,  of  which  seventy-fiye  per  cent  is  paid  up,  is  issued 
in  its  place. 

When  a  stockholder  wishes  to  dispose  of  his  stock  to  a  purchaser,  he  either  makes  out  a 
Transfer  of  Stock,  or  endorses  the  order  of  transfer  on  the  back  of  his  certificate  of  stock, 
which  he  surrenders  to  the  purchaser,  to  whom  a  new  certificate  is  issued,  and  the  old  certifi- 
cate is  filed  away  among  the  canceled  papers  of  the  company. 

We  give  forms  below  representing  a  subscription  list,  an  installment  list,  an  installment 
scrip,  a  partly  paid  up  certificate  of  stock,  the  regular  certificate  of  stock,  and  the  method  of 
transferring  stock, 


BOOKKEEPING  FOR  CORPORATIONS, 


SUBSCRIPTION  LIST. 

We,  the  undersigned,  subscribe  the  number  of  shares  placed  opposite  our  respsccive  namss 
to  the  Capital  Stock  of  the  Union  Real  Estate  Company,  and  we  agree  to  pay  the  calls  upci 
said  stock  as  they  may  be  made  by  the  directors  of  the  company. 


189.. 
Mar. 


Par  Val-ue 

A.  Learner 

College  City,  Your  State 

3000 

Thirty  Shares 

John  Morgan 

Central  City,  Any  State 

2500 

Twenty-five  Shar?; ". 

Aaron  Brown 

Central  City,  Any  State 

2500 

Twenty-five  Shar^ ; 

Henry  Thomas 

College  City,  Your  State 
Total 

2000 

Twenty  Shares 

looco 

One  Hundred  Shars^ 

This  should  be  followed  by  the  acknowledgment  and  seal  of  a  Notary  Public. 

FIRST  INSTALLMENT. 

The  Board  of  Directors  of  the  Union  Real  Estate  Company  have  voted  a  first  call  oi:  forty 
per  cent  of  the  Capital  Stock  of  the  company,  to  be  paid  to  the  treasurer  of  the  company  en 
or  before  March  6,  i8g. .,  as  follows: 


Date  of 
Call 

Subscribers 

No.  of 
Shares 

Installment 

When  Paid 

Amount  Paid 

Rems.r::'j 

l8q.. 

Mar.      2 

1 
1 

A.  Learner 
John  Morgan 
Aaron  Brown 
Henry  Thomas 

30 

25 
25 
20 

1200 

1000 

1000 

800 

Mar. 

5 

I 

6 

1200 

1000 

1000 

800 

INSTALLMENT  SCRIP. 


$. 


1,200 


Union  Real  Estate  Company. 

Received  of .A-.^'^':''^ 


)  ...-:^^... Shares 

■,  of  SiQO  Each 


Twelve  Hundred 


ri 


iJoua?- 


being  the  first  call  of  Forty  per  cent  on .  f^v!* Shares  of  the  capital  stock  cf  The  Unic>;i 

Real  Estate  Company 


Signed  at  College  City  this ^.{^^. day  oi....¥^'^.^J.[ 189. 

R   E.  Rogers, 

Sec. 


JcHN  Mor; 


Prs*. 


CERTIFICATE  OF  STOCK  PARTLY  PAID  UP. 


Capital  Stock  g  10,000. 


.^^...ShiTS^ 


Union  Real  Estate  Company. 

This  Cer tifies  that... ^:.:^^^^^^ 

is  entitled  to... ^":^ Shares 

of  One  Hundred  Dollars  each,  of  which. ..f'.^''?'.... per  cent  is  paid,  in  the  capital  stock  of  the 
Union  Real  Estate  Company,  transferable  only  on  the  books  of  the  company,  by  him  or  his 
lawful  representative,  on  surrender  of  this  certificate. 


3th 


March 


Signed  at  College  City  this.....-?.rf day  oi...3^':!':.\ 189— 

R.  E.  Rogers, 

Sec. 


John  Morgan, 


Pres, 


142 


HIGHER  ACCOUNTING. 


THE  CERTIFICATE  BOOK. 

Certificates  of  stock  are  printed  with  a  stub  on  the  left  margin,  on  which  the  secretary- 
records  all  items  of  importance  pertaining  to  the  certificate.  These  blanks  are  bound  in  a 
book,  and  when  the  certificates  are  issued  ana  torn  out,  the  marginal  memoranda  remain  in 
the  book,  and  from  the?Se  memoranda  the  transfer  entries  are  made  in  the  Stock  Ledger. 

The  following  is  the  ordinary  form  of  a  certificate  of  stock,  together  with  the  marginal 
record. 


Certificate  No ^..... 

...¥.^^^!!'..'.P.  189 

..iP...  Shares 
^100  Each. 

Issued  to...^:..^-..^'^.^^^'^.. 

Folio ^. 

Transferred  from^.f  ^^^:'f^.^ 

Folio I 

Received  this  Certificate. 
H.  C.  Warden 


No.  I. 


30 


. Shares 


Capital  Stock  $10,000. 

Union  Real  Estate  Company. 

CERTIFICATE  OF  STOCK. 

This  Certifies  that....^:..^-..^':'.''^''^... is  entitled  to 

..ffr^f Shares  of  One  Hundred  Dollars  each  in  the  Capital 

Stock  of  the  Union  Real  Estate  Company,  transferable  only  on 
the  books  of  the  Company,  upon  surrender  of  this  Certificate 
properly  indorsed. 


Signed  at  College  City,  this  ..  ^5^^''. day  of 


March 


189- 


R.  E.  Rogers, 

Sec. 


John  Morgan, 


Pres. 


When  the  above  certificate  is  torn  out  of  the  certificate  book  and  delivered  to  H,  C.  War- 
den, he  is  required  to  sign  his  name  in  the  marginal  record  in  the  stub,  acknowledging  delivery 
of  the  certificate.  If  Warden  is  not  present,  the  party  authorized  to  receive  the  shares  for 
him  can  acknowledge  delivery  of  the  certificate  for  him. 

ORDER  FOR  TRANSFER. 

The  following  order  for  transfer  may  be  written  on  a  blank  specially  prepared  and  bound 
in  a  book  of  transfer  blanks,  or  the  same  may  be  indorsed  on  the  back  of  the  certificate  which 
is  surrendered.  The  latter  method  seems  more  in  harmony  with  usage  pertaining  to  all 
varieties  of  papers  used  in  bwsiness. 


College  City,  March  15,  189 

For  value  received,  I  hereby  transfer  to  H.  C.  Warden,  all  my  right  and  inter- 
est in  Thirty  Shares  of  the  Capital  Stock  of  the  Union  Real  Estate  Company,  now 
standing  in  my  name  on  the  books  of  the  Company.  A.  Learner. 


If  this  transfer  were  written  on  the  back  of  the  certificate,  the  word  "within"  would  be 
inserted  in  the  clause,  "all  my  right  and  interest  in  the  within  Thirty  Shares." 

If  A.  Learner  wished  to  dispose  of  only  ten  of  his  shares  and  keep  the  rest,  he  would  sur- 
render the  old  certificate  and  transfer  only  ten  shares,  taking  a  new  certificate  for  the  remain- 
der, and  hi«  order  of  transfer  or  his  indorsement  would  be  expressed  accordingly. 


BOOKKEEPING  FOR  CORPORATIONS.  143 

THE.  STOCK  LE.DGEK. 

The  regular  account  books  of  a  corporation  are  kept  by  the  same  methods  as  those  of 
individuals  or  partners.  The  only  account  book  peculiar  to  a  corporation  is  the  Stock  Ledger, 
which  is  a  private  book  kept  by  the  secretary,  showing  the  capital  stock  Owned  by  each  of  the 
stockholders.  Each  stockholder  has  a  page  in  this  private  ledger,  and  his  account  has  credit 
for  the  paid  up  value  of  the  stock  he  holds. 

The  stock  ledger  is  ruled  like  any  other  ledger,  except  that  a  column  is  added,  next  to 
the  folio  column,  for  the  number  of  shares  transferred  in  each  transaction  recorded. 

The  entries  in  the  stock  ledger  are  made  from  the  installment  lists  and  from  the  stubs  of 
the  certificate  book.  A  stockholder  who  pays  an  installment  on  his  subscription  of  .stock 
should  have  credit  in  the  stock  ledger  for  the  amount  of  the  installment  only,  and  not  for  the 
par  value  of  the  stock.  If  shares  of  stock  are  transferred  before  their  par  value  is  fully  paid, 
the  paid  value  should  be  recorded  in  the  amount  columns,  the  party  disposing  of  the  stock 
being  debited,  and  the  party  purchasing  the  stock  being  credited. 

If  paid  up  stock  is  transferred,  the  stockholder  disposing  of  it  is  debited  for  its  par  value, 
and  the  party  purchasing  it  is  credited  for  the  same  amount,  the  number  of  shares  transferred 
being  recorded  in  the  share  column. 

The  certficates  of  stock  are  numbered  as  they  are  issued,  and  these  numbers  are  entered 
in  the  folio  column  of  the  accounts  in  the  stock  ledger,  while  the  folios  of  the  ledger  accounts 
are  entered  in  the  stub  of  the  certificate,  to  show  that  the  transfer  is  recorded  in  the  stock 
ledger. 

The  following  transactions  relate  to  the  stock  ledger,  the  general  transactions  of  the  same 
company  being  given  in  the  real  estate  business  represented  in  Set  Thirteen. 

TRANSACTIONS. 

For  the  first  transaction  see  Installment  List  No.  i. 

Mar.  10 — The  directors  order  a  second  call  of  sixty  per  cent  of  the  capital  stock  of  the 
Union  Real  Estate  Company,  of  which  A.  Learner  pays  ^1,800  Mar.  12,  John  Morgan  pays 
$1,500  Mar.  13,  Henry  Thomas  pays  $1,200  March  13,  and  Aaron  Brown  pays  $1.-500  Mar.  14. 

Mar.  15. — A.  Learner  transfers  his  stock,  30  shares  to  H.  C.  Warden. 

Mar.  20. — John  Morgan  transfers  10  shares  of  his  stock  to  A.  Learner. 

Mar.  21. —  Henry  Thomas  transfers  10  shares  of  his  stock  to  A.  Learner. 

Mar.  24. — Aaron  Brown  transfers  2  shares  of  his  stock  to  H,  C.  Warden. 

Mar.  27. — Aaron  Brown  transfers  5  shares  of  his  stock  to  G.  V.  Bentley. 

April  2. —  Henry  Thomas  transfers  3  shares  of  his  stock  to  Henry  Pierson. 

April  4. — John   Morgan  transfers  5  shares  of  his  stock  to  Martin  Towner. 

April  5. — John  Morgan  transfers  2  shares  of  his  stock  to  Henry  Pierson. 

April  12. — Aaron  Brown  transfers  3  shares  of  his  stock  to  G.  V.  Bentley. 

April  30. — A  dividend   of  $3,000  is  declared;  how  much   should  each  stockholder  draw? 

What  two   stockholders    can   combine  to  control  the  election  at  their  next  time  of  voting? 

The  stock  ledger  is  a  book  of  great  importance  when  the  stockholders  hold  tlieir  annual 
meeting,  as  it  gives  the  basis  of  their  voting  in  electing  officers  or  passing  any  measures  of 
importance.  Each  stockholder  is  entitled  to  one  vote  for  each  share  that  stands  to  his  credit, 
and  if  he  can  control  a  majority  of  the  shares  of  capital  stock,  he  can  control  the  majority  of 
votes  on  any  question  that  may  come  before  the  corporation. 

If  the  business  of  the  corporation  is  prosperous  and  the  books  show  a  considerable  gain, 
a  part  of  this  is  set  aside  in  a  reserve  fund  entitled  "Reserve  Profits,"  and  the  balance  is 
divided  among  the  stockholders  according  to  the  capital  stock  belonging  to  each.  The  part 
that  is  distributed  to  the  stockholders  is  called  a  dividend,  and  such  distributions  are  usually 
made  once  a  year. 

The  distribution  and  payment  of  dividends  does  not  require  entry  in  the  stock  ledger,  as 
this  book  is  kept  merely  to  show  at  any  time  the  invested  capital,  and  the  proportion  of  the 
same  belonging  to  each  stockholder. 

We  illustrate  on  the  following  page  five  accounts  from  the  stock  ledger,  showing  all 
entries  that  are  required  in  the  first  five  transactions. 


144 


HIGHER  ACCOUNTING. 


A  PAGE  OF  THE  STOCK  LEDGER. 


1 


A,  LEARNER. 


i8q- 
Mar. 


15 


H.  C.  Warden 


No. 

Shares. 

189- 

I 

30 

3000 

Mar. 

5 
12 

20 

3CXX) 

21 

Installment  No.  i 
.    "  2 


John  Morgan 
Henry  Thomas 


No. 

Shares. 

2 

30 
10 

1200 
1800 

3000 

1000 

3 

10 

1000 

JOHN  MORGAN. 


Mar. 


A.  Learner 
Balance 


l?9- 

10 

1000 

Mar, 

S 

J-J 

1500 

^3 
20 

2500 

Installment  No.  i 
Balance  down 


25 

1000 
1500 

2500 

15 

1500 

AARON  BROWN 


Mar. 


Installment  No.  i 
"     2 


25 


lOOO 

1500 


HENRY  THOMAS. 


i«g- 
Mar. 


21        A.    Learner 

Balance 


189- 

3 

10 

1000 

Mar. 

6 

10 

lOOO 

13 
21 

2000 

Installment   No.   i 
«  «     2 

Balance  down 


20 
10 

800 
1200 

2000 

1000 

H.  C.  WARDEN, 


189- 

Mar. 

IS 

1 

A.  Learner 


30 


3000 


Bookkeeping  for  manufacturers.  145 


Set    Ten. 


BOOKKEEPING  FOR  MANUFACTURERS. 


This  set  has  been  prepared  to  illustrate  a  system  of  bookkeeping,  that,  with  slight  modifi- 
cations, would  be  adapted  to  any  wholesaling  or  manufacturing  business. 

In  manufacturing,  it  is  desirable  to  know  the  relative  cost  of  the  various  elements  that 
enter  into  the  manufactured  product,  and  hence  an  account  with  each  leading  eiement  would 
give  more  satisfactory  information  to  the  proprietors  than  if  all  were  grouped  together  into  one 
property  account. 

Titles  adapted  to  the  business  can  be  chosen  to  represent  these  elements,  each  of  which  is 
debited  witli  its  own  cost,  and  the  manufactured  product,  when  disposed  of,  can  be  credited  to 
Merchandise.  These  several  accounts  being  debited  and  Merchandise  being  credited,  the  profit 
or  loss  in  manufacturing  can  be  determined  by  closing  the  debits  into  Merchandise.  In  the 
present  set  we  have  chosen  Fuel,  Wages,  Materials,  and  Commission  to  represent  the  debits 
or  cost  of  the  product,  and  Merchandise  for  the  credits  of  the  product  when  disposed  of. 

The  columnar  journal  represents  the  tendency  of  modern  bookkeeping  to  condense  rec- 
ords, and  group  the  essential  facts  relating  to  any  business  into  such  space  that  the  proprietor 
can  survey  all  at  a  glance,  and  make  a  fair  estimate  as  to  the  progress  of  his  business.  Special 
columns  are  assigned  to  each  title  that  is  likely  to  have  frequent  entries,  and  the  titles  that 
combine  to  show  the  progress  and  standing  of  the  business  are  grouped  on  the  same  page,  so 
that  a  glance  may  determine  their  relation  to  one  another  and  to  the  business. 

If  the  aggregate  of  the  cash  receipts  and  payments,  the  bills  receivable  received  and  dis- 
posed of,  the  charges  to  customers  and  the  amounts  paid  by  them,  the  expense  and  discount 
items,  and  the  cost  and  proceeds  of  merchandise  are  all  grouped  in  the  journal  daily,  and  the 
footings  of  the  several  columns  are  forwarded  from  page  to  page,  the  proprietor  can  have  all 
of  the  essential  facts  relating  to  the  business  at  any  given  date  by  turning  to  the  journal  for 
that  date. 

THE  BOOKS  USED. 

The  journal  is  the  main  historical  book,  and  all  debits  and  credits  are  posted  to  the  gen- 
eral ledger  from  it.  The  amounts  in  the  special  columns  would  not  be  posted  to  the  ledger 
more  frequently  than  once  a  month  or  once  a  year,  in  business,  as  the  footings  of  these  col- 
umns, forwarded  from  page  to  page,  would  enable  the  proprietor  to  survey  the  business  with 
greater  ease  and  rapidity  than  he  could  by  turning  to  the  ledger  accounts. 

We  have  required  the  student  to  post  the  footings  of  the  special  columns  to  the  ledger 
twice  in  this  set,  in  order  to  afford  him  drill  in  balancing  the  journal,  and  in  posting  these 
special  columns. 

All  transactions,  except  sales,  receipts,  and  payments,  are  entered  directly  in  the  journal 
with  proper  descriptive  memoranda.  Sales  are  recorded  in  the  sales  book,  and  cash  items  in 
the  cash  book,  and  the  entries  are  carried  from  these  books  in  condensed  form  to  the  journal, 
daily  Q,r  weekly,  according  to  the  extent  and  the  requirements  of  the  business. 


146  HIGHER  ACCOUNTING. 

The  journal  is  proven  in  balance  at  any  time,  by  bringing  the  footings  of  all  special  col- 
umns into  the  general  debit  and  credit  columns,  which  should  then  have  the  same  totals. 
These  can  be  entered  in  the  general  columns  and  the  journal  tested  at  any  time,  without  post- 
ing the  special  column  footings  to  the  ledger,  if  it  is  so  desired.  In  such  case  the  total  of  each 
special  column  is  forwarded  in  its  own  colum,  the  same  as  it  was  before  the  test  was  made  in 
the  general  columns. 

In  the  journal  represented  in  this  set,  Commission,  Fuel,  Wages  and  Materials  are  the 
four  titles  representing  the  direct  cost  of  the  manufacture  and  sale  of  merchandise,  and  the 
Merchandise  column  to  the  right  of  these  shows  the  credits  resulting  from  the  sale.  A  survey 
of  the  totals  in  these  five  columns  will  show  the  essential  facts  relating  to  the  merchandise 
account;  while  a  survey  of  the  other  columns  will  show  the  cash  on  hand,  the  balance  due 
from  dealers,  the  amount  of  bills  receivable  on  hand,  the  amount  paid  for  expenses,  and  the 
amount  received  for  interest  and  discount. 

The  cash  book  is  kept  as  a  petty  cash  book,  the  cash  items  being  entered  and  described  in 
the  order  of  their  occurrence,  and  the  results  being  combined  by  titles,  for  entry  Jn  the  journal, 
instead  of  being  posted  directly  to  the  ledger.  Cash  and  cash  items  received  on  account  from 
dealers  are  posted  directly  from  this  cash  book  to  an  auxiliary  ledger  with  dealers,  while  the 
total  of  the  amounts  received  from  the  dealers  is  credited  in  the  journal  to  Dealers'  account. 

The  cash  book  should  be  balanced  daily,  and,  as  all  cash  is  deposited  and  all  payments 
are  made  by  check,  this  balance  should  agree  with  the  cash  in  bank,  and  also  with  the  excess 
of  the  debit  over  the  credit  column  of  cash  in  the  journal. 

For  convenience  in  combining  the  items  for  the  journal,  a  special  column  may  be  wsed  on 
the  received  page  for  amounts  received  from  dealers  on  account,  and  a  corresponding  column 
on  the  paid  page  for  commissions  deducted  by  these  dealers.  The  entries  for  the  day  should 
be  grouped  on  a  slip  of  paper  and  the  footings  tested,  before  they  are  transferred  to  the  journal. 

When  goods  are  sent  to  dealers,  which  they  are  to  sell  on  commission  at  a  listed  price,  it 
is  customary  to  charge  the  dealers  at  the  listed  price,  crediting  them  with  the  same  amount 
and  debiting  Commission  when  they  remit  the  proceeds  after  deducting  commission.  These 
entries  will  occupy  less  journal  space  if  they  are  entered  in  the  cash  book  and  are  carried  to 
the  journal  in  the  grouping  of  cash  entries  at  the  close  of  the  day.  The  entire  amount  to  the 
dealers'  credit  is  entered  in  the  cash  book  as  received,  and  the  commission  deducted  is  entered 
as  cash  paid  for  commission,  the  difference  between  the  amounts  entered  as  received  and  paid 
being  the  cash  items  actually  remitted  by  the  dealer. 

If  the  dealer  remits  notes  to  apply  on  his  account,  the  same  can  be  entered  in  the  cash 
book  to  his  credit  as  cash  received,  and  to  the  debit  of  Bills  Receivable  as  cash  paid.  This 
will  bring  the  proper  debits  and  credits  in  the  journal  columns,  without  taking  any  extra 
journal  space.  The  dealer's  credits  are  posted  directly  from  the  cash  book  to  his  account  in 
the  dealers'  ledger,  while  the  total  of  such  credits  is  carried  to  the  credit  of  Dealers  in  the  journal. 

The  sales  book  in  this  set  should  have  a  special  column,  for  such  amounts  as  require 
posting  to  the  dealers'  ledger.  The  amounts  of  merchandise  sent  on  sale  and  the  sales  on  ac- 
count are  posted  to  the  debit  of  consignees  and  purchasers  in  the  dealers'  ledger,  and  the 
amounts  of  this  column  in  the  sales  book  are  forwarded  from  page  to  page,  and  the  total  carried 
to  the  journal,  as  often  as  desired,  to  the  debit  of  Dealers  and  credit  of  Merchandise. 

Sales  for  cash  are  entered  in  the  sales  book  without  being  extended  to  the  special  column, 
after  which  the  entries  are  checked  and  the  net  amounts  received  are  carried  to  the  cash  book, 
to  the  credit  of  Merchandise. 

There  is  another  method  of  keeping  the  sales  book,  which  is  used  by  many  wholesalers 
and  manufacturers  because  of  its  convenience.  The  invoices  or  bill  heads  are  printed  in  dupli- 
cate and  are  bound  into  books.  Duplicates  of  each  bill  are  made  either  by  copying  or  by  car- 
bon transfer.  One  of  the  bills  is  torn  out  and  sent  to  the  purchaser,  the  duplicate  remains  as  a 
stub  in  the  book.  The  stub  bills  take  the  place  of  a  sales  book,  and  if  several  are  printed  on  a 
page,  the  columns  can  be  added  and  forwarded,  the  same  as  the  sales  book  described  above. 

Three  ledgers  are  required  in  this  set.  the  general  ledger  for  all  accounts  that  belong  to 
the  business,  except  those  of  dealers  or  customers,  the  dealers'  ledger  for  customers'  accounts, 
and  the  stock  ledger  for  stockholders'  accounts. 


noOKKEEPING  FOR  MANUFACTURERS.  14; 

The  general  ledger  has  an  account  with  Dealers,  in  which  is  posted  the  aggregate  of  all 
debits  and  credits  that  are  posted  to  the  dealers'  ledger.  The  general  ledger  is  thus  kept  in 
balance,  while  the  dealers'  ledger  is  proven  correct  at  any  time  by  comparing  a  proof  of  its 
accounts  with  the  Dealers'  account  in  the  general  ledger.  The  excess  of  the  total  debits  or 
credits  in  the  proof  of  the  dealers'  ledger  should  equal  the  excess  of  the  debit  or  credit  side 
of  Dealers'  account  in  the  general  ledger. 

The  dealers'  ledger  should  contain  all  facts  of  importance  relating  to  each  account.  If, 
as  in  this  set,  a  part  of  the  charges  are  for  merchandise  sent  on  sale  subject  to  deductions 
for  commission,  and  other  charges  are  for  net  amounts  not  subject  to  such  deductions,  the 
fact  should  be  recorded  in  the  explanation  column  when  each  entry  is  made  in  the  ledger. 
Merchandise  sent  on  sale  should  be  entered  "Mdse.on  Sale,"  and  merchandise  sold  and  properly 
discounted  from  the  list  prices  should  be  entered  "Mdse.  net." 

If  a  dealer,  having  merchandise  on  commission,  remits  the  proceeds  of  a  sale  and  deducts 
his  commission,  he  should  have  credit  for  the  amount  of  remittance  and  commission.  In  the 
transactions,  under  date  of  April  4,  Henry  A.  Cushman  remits  cash  ;^400  and  deducts  commis- 
sion ;^ioo  on  a  sale  of  ;$5oo,  and  he  should  have  credit  in  the  money  column  of  the  ledger  for 
^500,  itemized  in  the  explanation  column  "Cash  ;^400,  Com.  ;^ioo." 

The  stock  ledger  is  kept  in  the  same  manner  as  in  Set  Nine,  and  has  no  connection  with 
the  other  books  of  the  company. 

The  time  book  is  illustrated  among  the  script  forms,  and  needs  no  explanations. 

The  writing  of  the  bill  book  and  the  computing  of  interest  on  notes  are  not  required  in 
this  set,  because  other  sets  in  the  text  afford  ample  drill  in  these  processes. 

THE  SCRIPT  FORMS. 

Four  pages  of  the  journal  are  given  to  illustrate  the  opening  entries,  other  original 
entries,  condensed  entries  from  the  cash  book,  the  method  of  forwarding  the  columns  to  new 
pages,  and  the  method  of  balancing  the  journal,  preparatory  to  posting  special  accounts  to  the 
ledger. 

Two  days  of  the  petty  cash  book  are  given,  and  below  these  on  the  left  page  are  given 
the  tickets  combining  the  cash  entries  for  transfer  to  the  journal.  The  check  marks  are 
writen  in  the  folio  column  of  the  cash  book  when  the  entries  are  transferred  to  the  daily 
cash  tickets. 

A  portion  of  the  time  book  is  given,  illustrating  fully  the  method  of  recording  each 
workman's  time  and  also  his  earnings  for  each  week. 

TRANSACTIONS. 

MONDAY,  APRIL    1,   189... 

A  stock  company  has  be:;n  incorporated  this  day  under  the  name  of  The  Brown  &  Sher- 
man Wagon  Company,  with  a  capital  stock  of  ^80,000  divided  into  shares  of  ^$100  each. 
The  following  persons  have  signed  the  subscription  list  for  capital  stock: 
Henry  Brown  ;^25,ooo,  Roger  Sherman  ^20,000,  Martin  Townsend  ^10,000,  Cyrus  Adams 
;^5,ooo,  John  Carter  ^5,000,  Peter  Foster  ^5,000  Aaron  Trent  ;^5,ooo,  Oliver  Jones  $5,000.  [A 
subscription  list  should  be  written  like  the  one  illustrated  in  the  preceding  set,  but  no  entries 
should  be  made  in  the  stock  ledger  until  the  subscriptions  are  paid  and  certificates  of  stock  are 
taken.] 

TUESDAY,  APKIL  2. 

Bought  of  Brown  &  Sherman  their  entire  manufacturing  plant  and  material,  including 
other  resources  and  liabilities  as  per  following  the  statement : 

Resources. — Factory  and  machinery  1^35,000;  lumber  and  other  wagon  material,  includ- 
ing finished  wagons  and  carriages,  $12,250  ;  bills  receivable  $5,000;  accounts  of  dealers  who 
hold  wagons  and  carriages  for  sale  on  commission,  Henry  A.  Cushman,  Corning,  $750.25  ; 
Cyrus  E.  French,  Fulton,  $692.25  ;  Geo.  A.  Truman,  Trenton,  $1,250.50;  Benjamin  Brown, 
Brunswick,  $1 ,526.75;  Emerson  Gardner,  Georgetown,  $619.20;  David  Horton,  Hudson,  $910.85. 


1 48  HIGHER  A  ceo  UN  TING. 


A  discount  of  5  per  cent  has  been  deducted  from  the  face  value  of  bills  receivable  to 
allow  for  uncollectible  notes,  and  a  commission  of  20  cer  cent  has  been  deducted  from  the 
amount  due  from  dealers,  as  they  are  authorized  to  deduct  that  amount  when  they  settle 
their  accounts. 

Liabilities. — Balance  of  account,  favor  the  Kent  Lumber  Co.,  Bentonville,  ;^2,8io.70;  favor 
The  Union  Iron  Co.,  Iron  City,  ^2, 749. 34;  favor  the  Western  Paint  Co.,  Chicago,  $775.55; 
favor  Fisk  &  Jones,  Boston,  $264.25. 

The  new  company  have  allowed  Brown  &  Sherman  the  net  worth  of  the  plant  as  shown 
in  above  statement,  giving  Henry  Brown  250  shares  of  stock  fully  paid  up  for  his  one-half 
interest,  and  Roger  Sherman  200  shares  of  stock  fully  paid  up,  and  credit  on  account  for  the 
remaining  $5,000,  for  his  one-half  interest.  [These  two  names  should  have  accounts  in  the 
stock  Ledger.] 

The  workmen  formerly  employed  by  Brown  &  Sherman  have  been  retained  at  following 
wages: 

Charles  Martin,  foreman  in  wood  work,  at  $2.75  per  day;  and  other  workmen,  numbered 
2  to  10  inclusive  (names  to  be  supplied  by  the  student),  in  same  department  at  $2  per  day. 
Henry  Spencer,  foreman  in  blacksmith  shop,  at  $2.50  per  day;  and  other  workmen,  numbered 
12  to  20  inclusive,  in  same  department,  at  $1.75  per  day.  John  Thomas,  foreman  in  trimming 
department,  at  $3  per  day;  and  other  workmen  numbered  22  to  30  inclusive,  in  same  depart- 
ment, at  $2.25  per  day.  Frank  Reynolds,  foreman  in  paint  shop,  at  $2.75  per  day;  and  other 
workmen,  numbered  32  to  40  inclusive,  in  same  department,  at  $2  per  day. 

Eight  hours  is  considered  a  day's  work  in  each  department. 

In  reporting  work,  if  any  of  the  men  lose  time,  the  number  of  hours  they  work  will  be 
reported. 

Workmen's  Report  for  Monday. — No.  2  si.x  hours,  No.  12  six  hours,  No.  15  five  hours. 
No.  24  six  hours,  No,  32  six  hours,  and  all  others  full  time. 

Workmen's  Report  for  Tuesday. — No.  3  six  hours.  No.  15  four  hours.  No.  22  five 
hours,  No.  33  six  hours,  and  all  others  full  time. 

WE,DNESDAY.  APRIL  3. 

Oliver  Jones,  Aaron  Trent,  and  Peter  Foster  have  paid  cash  for  the  amount  of  their  sub- 
scriptions to  the  capital  stock,  and  have  taken  certificates  of  stock  for  the  same. 

Paid  for  coal  for  engine  room  $75.  [All  payments  in  this  set  are  made  by  check,  and  all 
money  received  is  deposited  in  bank  at  the  close  of  each  day's  transactions.] 

Paid  for  invoice  of  paints  for  use  in  the  paint  shop  $55.50. 

The  Brown  &  Sherman  Wagon  Company  have  adopted  the  following 

LIST  OF  PRICES  ON  WAGONS  AND  CAR.RIAGE,S. 

Phaetons $130,00  Spring  Wagons ." .  .  .$95.00 

Surreys 125.00  Lumber   Wagons 90.00 

•    Top  Buggies 11 0.00  Road  Carts 25 .00 

Sent  Myron  Young,  Youngstown,  on  sale  at  list  prices,  3  Lumber  Wagons,  2  Road  Carts, 
I  Top  Buggy.  These  are  to  be  kept  on  sale  by  Myron  Young,  and  when  sold  he  will  deduct 
20  per  cent  commission  for  his  services  and  expenses  and  will  remit  to  the  company  for  the 
balance. 

Paid  for  postage  and  stationery  $5.75. 

Workmen's  Report. — No.  5  seven  hours.  No.  11  five  hours.  No.  23  six  hour.'^,  No.  35 
four  hours,  Nos.  7,  17  and  27  absent  all  day.     Others  have  worked  full  time. 

THURSDAY,  APRIL  4. 

Sent  our  check  to  the  Kent  Lumber  Co.  to  balance  their  account,  less  a  discount  of  2^/2 
per  cent  which  they  have  allowed. 


BOOKKEEPING  FOR  MANUFACTURERS.  149 

Received  an  invoice  of  iron  and  sttel  from  the  Union  Iron  Co.,  amounting  to  1^275.75, 
billed  on  account.     [Materials.] 

Paid  for  freight  on  the  last  invoice  ^55.75. 

Henry  A.  Cushman  has  reported  sales  amounting  to  ;^500,  and  has  sent  cash  for  same  less 
his  commission  of  20  per  cent. 

Sent  to  Cyrus  E.  French,  on  sale  at  list  prices,  2  Spring  Wagons,  2  Surreys,  3  Road  Carts, 

Sold  S.  A.  Jackson,  Elgin,  3  Top  Buggies,  2  Surreys,  4  Road  Carts.  Gave  him  a  list  dis- 
count of  20  per  cent,  and  a  cash  discount  of  ^  per  cent  on  the  net  amount  after  the  list  discount 
(described  briefly  as  discounts  20  and  5  per  cent),  and  received  cash  in  payment  of  the  bill. 

Paid  for  coal  for  use  in  blacksmith  shop  $\'j.'^0.     [Fuel.] 

Cyrus  E.  French  has  sent  cash  to  balance  his  account,  after  deducting  his  commission  of 
20  per  cent. 

Workmen's  Report. — No.  i  six  hours,  No.  12  seven  hours,  No.  19  five  hours,  No.  31  four 
hours,  Nos.  9,  29  and  39  absent  all  day.     Others  have  worked  full  time. 

FRIDAY,  APRIL  5. 

John  Carter  and  Cyrus  Adams  have  paid  cash  for  the  amount  of  their  subscription  to  the 
capital  stock,  and  have  taken  certificates  of  stock  for  the  same. 

Paid  Roger  Sherman  to  apply  on  account  $2,500. 

Received  an  invoice  of  leather  and  trimming  material  from  Fiske  &  Jones,  amounting  to 
;$i 75.25,  billed  on  account. 

Paid  for  freight  on  this  invoice  $15.25. 

Paid  for  new  engine  and  machinery  for  use  in  factory  $7,550. 

Received  cash  of  R.  A.  Howard  to  pay  his  note  indorsed  to  us  $555,  and  for  interest  on 
same  $25.50. 

Sent  to  Geo.  A.  Truman,  on  sale  at  list  prices,  6  Lumber  Wagons,  3  Spring  Wagons,  4 
Road  Carts. 

Paid  for  advertising  $27.25. 

Received  cash  of  Henry  Truman  to  pay  his  note  indorsed  to  us  $150,  and  for  interest  on 
same  $3.75. 

Henry  Brown  has  transferred  10  shares  of  his  stock  to  Oliver  Jones.     [Stock  Ledger.] 

Sent  to  Benjamin  Brown,  on  sale  at  list  prices,  3  Surreys,  i  Phaeton,  4  Road  Carts,  2 
Spring  Wagons. 

Emerson  Gardner  has  settled  his  account  in  full,  paying  us  cash  for  the  amount  due  after 
deducting  his  commission  at  the  usual  rate. 

Paid  for  office  books  $27.50. 

Cyrus  E.  French  has  sent  us  cash  to  apply  on  his  account  $200,  reserving  his  report  o^ 
commission  until  he  completes  his  sales. 

David  Horton  has  sent  us  cash  to  apply  on  his  account  $100,  without  reporting  commission. 

Sold  to  retail  buyers  at  the  factory  for  cash,  at  the  list  prices,  i  Surrey,  i  Phaeton,  2 
Spring  Wagons. 

Workmen's  Report. — No.  6  six  hours.  No.  26  five  hours,  No.  30  seven  hours.  No.  34  four 
hours.     Nos.  4,  8,  18  and  25  absent  all  day.     Others  have  worked  full  time. 

SATURDAY,  APRIL  6. 

Received  an  invoice  of  lumber  and  wagon  material  from  the  Kent  Lumber  Co.,  amounting 
to  $1,516.25,  billed  on  account. 

Paid  for  freight  on  last  invoice  $115.75. 

Martin  Townsend  has  taken  50  shares  of  the  stock  for  which  he  subscribed,  paying  cash 
for  the  same,  and  receiving  a  certificate  for  that  amount. 


ISO 


HIGHER  ACCOUNTUSiG. 


(yJfiyCJL-f,  rrf- 


^—^>(—^.JLf^ ■ 


ev 


auCZ^e-r^J 


foo< 


5> 


3S~oao 


^A^  a—9-c/U     ^-'■Mje>\,-v--i.'«-<»,'vt^ 


^ 


vi-v— »_.^  «^  A-tai/ 


J^.»-»-v^         -^c^-^J^       ^2-.-Wt 


yooc 


7° 


7vr 


'V-, 


f<i 


/vTo 


V7; 


/«.  7  7? 


J  1-- 


/>?«. 


■31  ^t- 


25* 


V^o 


BOOKKEEPING  FOR  MANUFACTURERS. 


151 


odln- 


^< 


"^ 


C^ 


vf/Vf 


S°oo 


lifx 


s 


7S 


.fi 


'7 


/  s.a.So 


6'J- 


J-o 


rsj^ 


ss 


/ 1 4  J  7 


7^' 


vT/fe 


70 


li  i 


I  ;2 


HIGHER  ACCOUNTING. 


COjoyi^JL  \r  /^f  — 


-^. 


<v 


I  /  7  ■i">    ?  "       /■i'Jo^.js-j 


O  y--l'-CC\yi~JLJL^     ti~  '--H. 


6 


yi^  aaJy'l...-<JU^ 


yyi  aXi^^i..,xJii_^ 


lvjLiJtjLAy%^  Oc«-^-la/    G). 


G^cJ-^-^o:-   -r  -f*   /o  a 


^. 


^aJuU^  o-M^    cu<.-t^  x^     o.fi-v<«u-CA^i.d^ 


^.M^JLjU-'^eJi.      C»-0-i.-^.^,^  teA^^teu,^ 


/•S~oo 


sS'S'OO 

u-yf 


/fT2.3l 


S7 
to 


S(,s 


•fooo 


/i  7  y  f     32-       3xJ-r     4J 


77^i 


S-o 


Jof^. 


J&&1.  < 


■*'7 


/fe>5-»  r 


V-" 


'6.i7r 


V'.'yi 


1^ 


2  » 


BOOKKEEPING  FOR  MANUFACTURERS. 


153 


SJ'fl 


y  J-      1  J-  -J-o  .  < 


3.37S  -To 


/IS- 


'iyto 


9SXf 


fo 


i/^STi 


is- 


Yio 


fiy. 


^7 


%i 


^-o,^ 
/*>- 


;V-<x 


^i;,*"  ^ 


v^7 


iCJ/ 


^^ 


?i 


yrf-f 


/vr/6 


.2  6J-  , 


/  ij^yc^i.. 


3  yvo 


^9f  / 


3S-/ 


154 


HIGHER  ACCOUNTING. 


Cl/^^^^)^ff- 


-^ 


cp&y 


<3Jl-t-Cl,<[flX-4X 


,^X«'*-*-C.A.-tfL^^ 


C7^"<r-C«-t — . 


y 


Sa^^<J^ 


I4- 


V 


v^ 


"O  y-r-t^,<u/- ^t    ijt^\ju^K,'\,-<:'t%^        'io  o'^.a-Zy^ 


s- 


J'Ol 


lefS. 


:2v5- 


5~/  L 


/Sooo 


r  o 


S.S 


/•S'o  o  o 


/V?64 


HT^ 


/(^h^d 


/3^'io 


7^ 


J^ 


iL 


CASH  ENTRIES  FOR  APRIL  3  AND  4,  TICKETED  FOR  THE.  JOURNAL. 


^A---^_y 


e^ 


/J6.  2 


J^o^^tAy   <^. 


0-U-,  7j- 

3  /    ■>->'(^*~' 


^. 


<v 


Cv. 


/   7  ^-^7 


^  J  /  2S.4  0 


BOOKKEEPING  FOR  MANUFACTURERS. 


155 


dj^^-i^^ftf --^'   <5<_.<^A_y 


Jtyy- 


^c 


■\UL-. 


\ 


¥ 


^IC'OK-i-O'  "too— »Z_  T-<'^  (/J^c^jeAd/uvWfc^ 


7^ 


/<30 


/,3r  v^<r 


.2  r/o 


/J  6 


I s  000 


7^ 


4-s 


3  /  S.Z. 


/6  fe-^ 


ZJ. 


^ 


TE,N  NAMES  FROM  THE,  TIME  BOOK.  Ol 


''J 


CU^X^>^trryt/    \CuCdJr' 

(9  Vn..  /o,  C>-»-v>.-*- 


/ 

>•■ 

J 

3/ 


7^ 


r>r 


i*' 


.?^, 


^.fi^ 


/  / 
// 
to 

/  / 

/  s. 

// 


2.  2. 
/  3 


<5<. 


J»at 


<5l/iA^.    /O 


156  HIGHER  ACCOUNTING. 

Geo.  A.  Truman  has  settled  his  account,  not  including  yesterday's  debit,  deducting  his 
commission  and  paying  balance  by  5  notes  amounting  to  ^500,  indorsed  to  us  and  accepted  at 
their  face  value,  and  cash  for  the  remainder.     [Enter  all  in  the  cash  book.] 

Sent  Emerson  Gardner,  on  sale  at  list  prices,  i  Surrey,  i  Phaeton,  2  Road  Carts,  2  Lum- 
ber Wagons. 

Sent  our  check  to  the  Union  Iron  Co.  for  ;^i  ,500,  to  apply  on  account. 

Received  an  invoice  of  paints  and  oils  from  the  Western  Paint  Co.,  amounting  to  1^265.25, 
billed  on  account  with  a  cash  discount  offer  of  5  per  cent  if  paid  in  10  days. 

Paid  for  freight  on  last  invoice  $\'j .y^. 

Benjamin  Brown  has  reported  sales  of  our  wagons  and  carriages  amounting  to  ;^  1,1 25, 
which  he  has  paid  in  cash  less  his  commission  of  20  per  cent. 

Sent  Thomas  Kent,  Kingston,  on  sale  at  list  prices,  3  Lumber  Wagons,  4  Road  Carts,  2 
Phaetons. 

Sold  for  cash  at  the  factory  at  list  price  2  Surreys. 

Paid  for  electric  light  in  office  and  factory  ^27.50. 

Received  cash  of  Howard  Sumner  to  pay  his  note  indorsed  to  us  $115,  and  for  interest  on 
satne  $2.})0. 

Workmen's  Report. — No.  6  six  hours,  No.  9  six  hours.  No.  10  five  hours,  No.  16  four 
hours.  No.  20  seven  hours,  No.  28  three  hours.     Others  have  worked  full  time. 

Drew  check  for  the  total  amount  and  paid  workmen's  wages  for  the  week,  per  time   book. 

DIRECTIONS  FOR  POSTING  AND  PROVING. 

Carry  the  footings  of  the  special  columns  to  the  general  columns  in  the  journal.  Add  the 
general  columns  to  see  if  your  journal  is  in  balance. 

Post  all  titles  to  the  general  ledger  and  take  a  proof  of  same.  The  cash  balance  in  the 
petty  cash  book  should  agree  with  the  balance  shown  in  the  ledger  account  with  cash.  The 
proof  of  the  ledger  should  be  recorded  in  the  trial  balance  book. 

The  dealers'  ledger  should  be  posted  from  the  sales  book  and  petty  cash  book,  and  a  proof 
of  same  should  be  taken.  The  excess  of  the  debits  in  the  proof  of  the  dealers'  ledger  should 
be  the  same  as  the  debit  excess  in  "Dealers"  account  in  the  general  ledger.  The  proof  of  the 
dealers'  ledger  should  be  recorded  in  the  trial  balance  book,  on  the  same  page  below  the  proof 
of  the  general  ledger. 

MONDAY,  APRIL  8. 

Henry  Morgan  has  been  engaged  as  traveling  salesman  for  the  company  at  a  salary  of 
$50  per  week  and  expenses,  and  we  have  advanced  $2<)  to  apply  on  his  expense  account, 
[Debit  him  for  all  money  paid  him  on  expense  or  salary  account,  and  credit  him  with  expenses 
reported  and  salary  earned.] 

Paid  for  a  mileage  book,  to  be  used  on  the  railway  by  our  traveling  salesman  ^$20. 
[Expense.] 

Henry  A.  Cushman  has  sent  a  bank  draft  for  the  balance  of  his  account  less  his  commis- 
sion on  same;  and  we  have  sent  him,  on  sale  at  list  price,  2  Lumber  Wagons,  2  Phaetons,  3 
Road  Carts,  i  Surrey. 

Benjamin  Brown  has  paid  cash  for  his  notes  in  our  hands  now  due  1^700,  and  for  interest 
on  same  ;$  14.70.  He  has  also  paid  the  balance  of  his  old  account,  not  including  his  debit  on 
the  5th  inst.,  after  deducting  his  commission  on  same  at  the  usual  rate. 

Sent  Geo.  A.  Truman,  on  sale  at  list  prices,  3  Spring  Wagons,  2  Top  Buggies,  i   Surrey. 

Martin  Townsend  has  paid  cash  for  the  remainder  of  his  subscription  to  the  capital  stock 
and  has  taken  a  certificate  for  the  same. 

Sent  David  Horton,  on  sale  at  list  prites,  3  Road  Carts,  2  Lumber  Wagons,  i  Spring 
Wagon. 

Sold  the  old  boiler  and  engine  which  we  purchased  with  the  factory,  and  which  we  have 
replaced  with  a  larger  outfit,  to  Roger  Shernmn  for  ;^  1,75c  to  apply  on  his  account. 


BbOKKEEPING  FOR  MANUFACTURERS.  157 

Received  an  invoice  of  iron  and  steel,  to  be  be  used  irt  the  factory,  fron  the  Union  Iron  Co. 
amounting  to  ^452.60,  billed  on  account. 

Paid  freight  on  this  invoice  ^52.25. 

Sent  a  bank  draft  to  the  Western  Paint  Co.  for  .$750,  to  apply  on  accdunt.  Gave  our 
check  for  this  draft,  and  also  for  exchange  50  cents. 

David  Horton  has  deducted  commission  on  his  entire  balance  of  Apr.  ist,  and  has  sent 
us  a  bank  draft  for  the  remainder  less  the  amount  he  remitted  on  the  5th  inst. 

Received  cash  from  Clement  Brown  to  pay  his  note  indorsed  to  us  ;^400,  and  interest  on 
same  ^8. 

Paid  for  postage  for  office  use  ;^5. 

Sold  to  Howard  Benton,  Bentonville,  3  Phaetons,  2  Top  Buggies,  i  Spring  Wagon,  at  list 
prices  less  discounts  of  20  and  5  per  cent,  receiving  cash. 

Sent  Myron  Young,  on  sale  at  list  prices,  3  Lumber  Wagons,  3  Spring  Wagons,  i  Road  Cart. 

Sold  to  retail  buyers  at  5  per  cent  discount  from  list  prices  for  cash,  i  Surrey,  i  Top 
Buggy,  I  Phceton,  3  Road  Carts. 

Workmen's  Report. — No.  3  six  hours,  No.  10  five  hours.  No.  13  four  hours,  No.  20  seven 
hours,  No.  36  six  hours.     Nos.  5,  15  and  28  absent  all  day.     Others  have  worked  full  time. 


TUE,SDAY,  APRIL  9. 

Sent  a  bank  draft  to  the  Kent  Lumber  Co.  for  ;^  1,000,  to  apply  on  account,  giving  a  check 
to  pay  for  the  draft  and  for  exchange  $\. 

Gave  our  check  for  ^12,500,  to  pay  for  a  lot  and  building  adjoining  the  factory  grounds, 
to  be  used  for  warehouse  and  salesroom  for  wagons  and  carriages.     [Factory.] 

Paid  for  repairing  machinery  in  factory  $27.50.  [If  an  investment  is  made  adding  to  the 
permanent  value  of  the  machinery.  Factory  account  should  be  debited;  if  merely  to  repair 
machinery.  Expense  should  be  debited.] 

C.  E.  French  has  deducted  commission  on  his  invoice  of  4th  inst.,  and  has  sent  us  cash  for 
the  balance  less  his  remittance  of  the  5th  inst. 

Sent  C.  E.  French,  on  sale  at  list  prices,  2  Phaetons,  2  Surreys,  2  Top  Buggies,  5  Lumber 
Wagons,  4  Road  Carts. 

Received  an  invoice  of  Leather  and  Trimmings,  for  use  in  the  factory,  from  Fisk  &  Jones 
amounting  to  $452.25,  billed  on  account,  with  a  discount  offer  of  5  per  cent  if  paid  in  10  days. 

Paid  for  freight  on  last  invoice  $16.25. 

Benjamin  Brown  has  deducted  commission  on  his  invoice  of  5th  inst.,  and  has  paid  the 
balance,  indorsing  notes  to  us  amounting  to  $450  and  giving  us  cash  for  the  remainder. 

Sent  Benjamin  Brown,  on  sale  at  list  prices,  3  Lumber  Wagons,  4  Road  Carts,  2  Phaetons, 
I  Top  Buggy. 

Paid  for  3  car  loads  coal  for  use  in  the  factory  $  1 20. 

Sold  John  Terry,  Trenton,  4  Surreys,  2  Phaitons,  i  Spring  Wagon,  3  Road  Carts,  at  list 
prices  less  discounts  of  20  and  5  per  cent,  receiving  cash. 

Received  cash  from  Myron  Young  for  his  invoice  of  3d  inst.,  less  his  commission. 

Sent  Emerson  Gardner,  on  sale  at  list  prices,  3  Spring  Wagons,  4  Lumber  Wagons,  2 
Road  Carts. 

Sold  Morris  &  Neff,  Madison,  2  Surreys,  3  Lumber  Wagons,  4  Road  Carts,  at  list  prices 
less  20  per  cent  discount,  billing  on  account.  [If  regular  discount  is  deducted  when  goods 
are  billed,  the  debit  entry  in  the  ledger  should  have  "Mdse.  net"  in  the  explanation  column, 
to  indicate  that  it  is  not  subject  to  a  deduction  for  commission.] 

Sold  to  retail  buyers,  at  5  per  cent  discount  from  list  prices  for  cash,  2  Phaetons,  2  Spring 
Wagons,  I  Surrey. 

Workmen's  Report. — No.  i  five  hours,  No.  9  six  hours.  No.  15  seven  hours,  No.  24  four 
hours.  No.  38.  four  hours.     Nos.  12,  20  and  30  absent.     Others  have  worked  full  time. 


158  HlGHEk  ACCOUNTING. 

WEDNE.SDAY,  APRIL  10. 

Paid  cash  for  insurincr  factory,  machinery  and  materials  for  ;$4O,O0O  at  i  J/(  per  cent. 

Received  cash  of  James  Martin  in  payment  of  his  notes  in  our  hands  %12^,  and  for  interest 
on  same  ;^9.75. 

Henry  Morgan  has  sent  orders  which  we  have  filled  and  shipped  to-day,  as  follows : 

Henry  Dalton,  Dixon,  i  Surrey,  i  Phaeton,  2  Road  Carts,  i  Top  Buggy,  at  list  prices  less 
20  and  5  per  cent  discount,  subject  to  our  sight  draft.  We  have  drawn  on  Dalton  at  sight  for 
the  net  amount  of  the  bill,  and  have  sent  the  draft  to  the  Commercial  Bank  of  Dixon  for 
collection.  [Make  memorandum  of  the  draft  in  the  sales  book,  and  debit  Dalton  until  the 
draft  is  paid.] 

George  Carter,  Canton,  2  Surreys,  3  Lumber  Wagons,  2  Spring  Wagons,  at  list  prices  less 
20  per  cent  on  account. 

Fisk  &  Jones  have  drawn  on  us  for  ^264.25,  to  apply  on  account,  and  we  have  paid  same 
including  exchange  25  cents. 

George  A.  Truman  has  sent  us  cash  for  his  invoice  of  5th  inst.,  less  his  commission  on 
same. 

Paid  for  salaries  of  employes  in  the  ofSce  $120.     [Expense.] 

Received  an  invoice  of  wagon  material  from  the  Kent  Lumber  Co.,  amounting  to  $2,216.25, 
billed  on  account. 

Paid  for  freight  on  last  invoice  $175.50. 

Sent  to  Thomas  Kent,  on  sale  at  list  prices,  3  Phaetons,  6  Lumber  Wagons,  2  Spring 
Wagons,  6  Road  Carts. 

Emerson  Gardner  has  sent  us  cash  to  pay  his  invoice  of  6th  inst.,  less  his  commission  on 
same. 

Sent  a  bank  draft  to  the  Union  Iron  Co.  for  $1,250.  to  appl\'  on  account.  Gave  our  check 
to  pay  for  the  draft  and  for  exchange  $1. 

Sold  to  retail  buyers  for  cash  at  list  prices,  i  Surrey,  i  Top  Buggy,  3  Road  Carts. 

Workmen's  Report. —  No.  3  five  hours.  No.  14  six  hours,  No.  26  four  hours.  Nos.  6,  16, 
24  and  36  absent.      Others  have  worked  full  time. 


THURSDAY,  APRIL  11. 

Aaron  Trent  has  transferred  i  5    sliarcs  of  his  .stock  to  Oliver  Jones. 

Received  cash  from  Morris  &  Neff  to  apply  on  account  $200.  Sold  them  3  Lumber 
Wagons,  2  Spring  Wagons,  at  20  per  cent  discount  from  list  prices,  billing  on  account. 

The  Kent  Lumber  Co.  have  drawn  on  us  for  $5  16.25,  to  apply  on  account,  and  v^e  have 
paid  the  draft  and  exchange  on  the  same  50  cents. 

George  O.  Cushman  has  paid  cash  for  his  notes  indorsed  to  us  $390,  and  for  interest  on 
same  $7.80. 

Henry  Morgan  has  sent  us  a  statement  of  his  traveling  expenses  to  date,  amounting  to 
$22.25,  which  we  have  credited,  and  we  have  sent  him  a  check  for  $30  for  expense  money. 

Sent  Henry  A.  Cushman,  on  sale  at  list  prices,  2  Top  Buggies,  i   Phaiton.  2  Spring  Wagons. 

Received  an  invoice  of  paints  and  oils,  for  use  in  the  factory,  from  the  Western  Paint  Co., 
amounting  to  $315.15,  billed  on   account,  with  a  discount  offer  of  4  per  cent  if  paid  in  15  days. 

Paid  freight  on  the  last  invoice  $1  5.45. 

Received  cash  from  Thomas  Kent  for  his  invoice  of  the  6th  inst.,  less  his  commission  on 
same. 

Sent  David  Horton,  on  sale  at  list  prices,  4  Roac  Carts,  3  Spring  Wagons,  2  Phaetons. 

Paid  teamsters  for  their  services  to  date  $29.25.     [Expense.] 

Send  a  check  to  the  Western  Paint  Co.  for  $25.55,  to  apply  on  account. 

Sold  to  retail  buyers  for  cash  at  list  prices,  2  Surreys,  i  Phaeton,  2  Spring  Wagons. 

Gave  Roger  Sherman  a  check  to  balance  his  account; 


BOOKKEEPING  FOR  MANUFACTURERS.  159' 


Workmen's  Report. — No.  21  five  hours,  No.  37  six  hours,  No.  38   four  hours,  No.   40 
three  hours.     Nos.  i,  10,  19  and  26  absent.     Others  have  worked  full  time. 


FRIDAY.  APRIL  12. 

Received  a  draft  from  the  Commercial  Bank  of  Dixon,  to  pay  for  our  draft  on  Henry 
Dalton  collected  by  them  less  their  collection  fee  of  ;^i. 

Sent  a  check  to  the  Western  Paint  Co.  to  pay  their  invoice  of  the  6th  inst.,  less  the  dis- 
count they  offered. 

Received  cash  of  C.  I.  Lane  in  payment  of  his  note  indorsed  to  us  ;^385,  and  for  interest 
on  same  $3.85. 

Settled  in  full  with  The  Union  Iron  Co.,  receiving  a  discount  of  5  per  cent  on  the  amount 
now  due  them,  and  giving  them  a  check  for  the  balance. 

Received  cash  from  George  Carter  ;^2  50,  to  apply  on  account. 

Sent  to  Myron  Young,  on  sale  at  list  prices,  2  Spring  Wagons,  3  Road  Carts,  i  Surrey. 

Paid  bookkeeper's  salary  to  the  15th  inst.,  ;^50. 

David  Horton  has  settled  for  his  invoice  of  the  8th  inst.,  deducting  his  commission  and 
sending  us  notes  indorsed  in  our  favor  for  ;^250  and  cash  for  the  balance. 

Paid  for  coal  for  use  in  the  factory  ;^50. 

Sold  P.  A.  Bentley,  Bluffton,  3  Top  Buggies,  2  Surreys,  4  Lumber  Wagons,  at  list  prices 
less  discounts  20  and  5  per  cent,  receiving  cash. 

Henry  A.  Cushman  has  sent  cash  for  his  invoice  of  the  8th  inst.,  less  his  commission  on 
same. 

Workmen's  Report. — No.  2  four  hours,  No.  7  six  hours,  No.  11  seven  hours,  No.  18  five 
hours,  Nos.  29  six  hours.    No.  17,  22,  23  and  31  absent  all  day.     Others  have  worked  full  time. 


SATUKDAY,  APKIL  13. 

Received  cash  from  Myron  Young  to  pay  his  invoice  of  the  8th  inst.,  le.ss  his  commission 
on  same. 

Sent  a,  check  to  The  Western  Paint  Co.  to  pay  their  invoice  of  the  i  ith  inst.,  less  the  dis- 
count they  offered. 

John  Thomas  has  paid  us  cash  for  his  note  indorsed  to  us  $2"/^,  and  for  interest  on  the 
same  ;^5.50. 

Gave  a  check  for  ^1,250  to  pay  for  new  machinery  for  use  in  the  factory. 

Fiske  &  Jones  have  drawn  on  us  for  the  amount  of  their  invoice  of  the  5th  inst.,  and  we 
have  given  our  check  to  pay  for  same  including  exchange  50  cents. 

E^merson  Gardner  has  settled  for  his  invoice  of  the  9th  inst.,  deducting  his  commission 
and  remitting  notes  indorsed  to  us  for  .^450,  and  cash  for  the  balance. 

Sold  to  retail  buyers  for  cash  at  list  prices,  2  Lumber  Wagons,  3  Road  Carts,  i  Surrey. 

Paid  for  coal  for  the  engine  room  ;^40. 

George  A.  Truman  has  paid  cash  for  his  invoice  of  the  8th  inst.,  after  deducting  his  com- 
mission. 

Henry  Morgan  has  returned  and  reported  the  balance  of  his  expenses  for  the  week  $1  5.75, 
and  we  have  paid  him  in  full  of  account  to  date  after  giving  him  credit  for  his  wages  for  one 
week. 

Workmen's  Report. — No.  8  four  hours,  No.  35  four  hours,  No.  7  five  hours,  No.  33  five 
hours,  No.  4  six  hours,  No.  25  seven  hours.  No.  27  seven  hours,  No.  31  seven  hours.  Others 
have  worked  full  time. 

Paid  the  workmen's  wages  for  the  week  per  time  book. 

Roger  Sherman  has  transferred  50  shares  of  his  capital  stock  to  Oliver  Jones. 


160  HIGHER  ACCOUNTING. 

Prove  the  Journal,  and  post  and  prove  the  ledgers,  in  the  same  manner  as  directed  on  the 
6th  inst.,  recording  the  proofs  of  the  general  ledger  and  dealers'  ledger  in  the  trial  balance 
book.  The  stock  ledger  should  have  an  excess  on  the  credit  side  equal  to  the  amount  of  the 
capital  stock. 

DECLARING  A  DIVIDE,ND  AND  CLOSING  THE  LEDGE.R. 

Preparatory  to  declaring  a  dividend,  make  a  balance  sheet,  showing  resources,  liabilities, 
gains  and  losses,  using  the  following  inventories  and  estimates  of  ledger  accounts: 

Factory  and  machinery  ^55,000,  insurance  prepaid  and  unexpired  ;^490,  office  books  and 
stationery  ;^20,  due  to  officers  for  salaries  $2^^,  due  to  Electric  Light  Co.  for  lighting  office 
and  factory  ^12.75,  fuel  on  hand  ^22.50,  materials  on  hand  and  finished  stock  ready  for  sale 
^7,562.40. 

All  bills  receivable  are  considered  collectible. 

Accrued  interest  on  bills  receivable  amounts  to  ^65.20. 

The  accounts  in  the  dealers'  ledger  are  all  considered  good,  but  commissions  must  be 
estimated  and  deducted  on  all  balances  from  dealers  who  hold  goods  on  sale. 

The  directors  of  the  company,  after  examining  the  balance  sheet,  have  declared  a  dividend 
of  five  per  cent  on  the  capital  stock.  [This  transaction  requires  a  journal  entry,  "Loss  and 
Gain  Dr.,  Dividend  Cr."] 

The  dividends  have  been  paid  to  the  stockholders.  [As  there  are  no  other  cash  entries 
today,  these  payments  may  be  entered  in  the  journal,  "Dividends  Dr.,  Cash  Cr.,"  followed  by  a 
list  of  the  payments  as  an  explanatory  entry.] 

After  posting  the  above  journal  entries,  the  inventories  should  be  entered  in  the  ledger 
and  all  accounts  should  be  closed.  Loss  and  Gain  account  should  be  closed,  $4,000  being 
carried  to  the  credit  of  Dividends  and  the  balance  of  the  gain  to  the  credit  of  Reserve  Profits. 
All  resources  and  liabilities,  including  inventories,  should  be  brought  down  in  their  respective 
accounts,  after  which  a  trial  balance  should  be  taken  to  show  the  ledger  in  balance  after  closing. 


BOOKKEEPING  FOR  COMMISSION  MERCHANTS.  i6i 


Set   E^leven. 


COMMISSION    AND    FORWARDING. 


An  agent  is  called  a  Commission  Merchant  when  he  has  the  merchandise  consigned  to 
him  in  his  possession,  and  sells  it  in  his  own  name.  If  he  sells  any  of  the  merchandise  on 
account,  he  assumes  the  responsibility  of  collecting  the  same.  The  compensation  which  he 
receives,  which  usually  includes  pay  for  his  services  and  a  small  guaranty  to  insure  him  against 
loss  on  bad  accounts,  is  called  Commission. 

The  property  sent  for  sale  is  called  a  Consignment,  the  firm  sending  the  property  a  Con- 
signor, the  agent  to  whom  sent  a  Consignee. 

The  agent's  statement  of  sales  and  expenses  is  called  an  Account  Sales.  The  consignor's 
interest,  or  the  amount  left  after  deducting  commission,  expenses  and  other  payments,  is  called 
the  Net  Proceeds. 

The  commission  is  usually  estimated  upon  the  amount  of  the  sale  or  purchase,  being  a 
per  cent  of  the  money  value;  but  in  some  kinds  of  merchandise,  especially  grain  and  produce, 
the  commission  is  a  certain  amount  per  pound,  or  bushel,  etc  ,  according  to  the  standard  used 
in  estimating  the  article. 

THE.  BOOKS  USED. 

In  making  the  records  of  the  following  transactions  the  student  will  require  a  general 
sales  book,  commission  sales  book,  journal,  cash  book,  and  ledger.  Provision  has  been  made 
for  omitting  the  bill  book,  as  it  would  be  kept  in  the  same  manner  as  in  Set  Seven.  Bills 
Receivable  and  Payable  debits  and  credits  will  be  posted  to  the  ledger  from  the  journal,  cash 
book,  and  sales  book. 

A  commission  merchant  generally  finds  it  necessary  to  buy  and  sell  some  articles  as  his 
own  merchandise,  besides  the  goods  consigned  to  him  for  sale,  and  it  frequently  happens  that  a 
single  order  from  a  customer  will  include  articles  from  several  different  consignments,  as 
well  as  other  articles  belonging  to  the  merchant  himself.  These  goods  are  all  billed  to  the 
purchaser  in  one  invoice  as  bought  of  the  commission  merchant,  without  reference  to  the  real 
ownership. 

The  items  sold  are  listed  in  the  general  sales  book  as  they  are  on  the  invoice,  indeed, 
many  dealers  make  out  their  invoices  with  copying  ink,  and  take  letter  press  copies,  so  that 
their  sales  book  consists  of  facsimile  copies  of  the  invoices  they  have  sent  out.  On  the  left 
margin  of  this  book  can  be  written  the  ownership  of  the  different  items  in  each  sale,  after 
which  the  sales  of  commission  goods  can  be  carried  to  the  commission  sales  book  as  explained 
below.  If  a  special  column  is  kept  for  the  amounts  of  merchandise  sales,  these  can  be 
forwarded  from  page  to  page,  and  the  total  for  the  month  posted  in  one  entry  to  the  credit  of 
Merchandise. 

The  commission  sales  book  contains  a  separate  account  with  each  consignment  sent  to  the 
merchant  for  sale.  It  is  kept  in  various  forms,  but  the  simplest,  and  the  one  most  commonly 
used,  consists  of  a  double  page  of  journal  ruling,  the  left  page  being  used  for  debits  and  the 
right  for  credits. 

When  the  (Consignment  is  first  received,  a  title  is  written  in  the  commission  sales  book, 
consisting  of  the  number  of  the  consignment  (numbers  from  i  upward  being  given  to  these 
consignments  in  the  order  of  their  arrival),  the  name  and  address  of  the  consignor,  together 
with  the  date  when  the  consignment  was  received,  and  a  memorandum  of  the  items  in  the  con- 
signment; but  no  amounts  are  extended  to  the  money  columns  unless  the  consignment  has 
caused  us  some  item  of  expense. 


162  HIGHER  ACCOUNTING. 

All  claims  that  we  have  against  a  consignment  for  money  advanced,  expenses  paid  or 
assumed  by  us,  or  charges  made  by  us,  are  entered  on  the  left  page  as  debits.  All  proceeds 
arising  from  the  sale  of  a  consignment  are  entered  on  the  right  page  as  credits,  no  distinction 
being  made  between  cash  sales  and  time  sales,  as  these  do  not  affect  the  consignor,  the  com- 
mission merchant  assuming  all  risks  in  case  of  time  sales.  The  difference  between  the  debits 
and  credits  is  the  consignor's  net  proceeds,  and  tho  same  is  entered  on  the  debit  side  of  the 
consignment  to  balance  the  account.  If  the  net  proceeds  are  remitted  to  the  consignor,  a 
corresponding  credit  will  appear  in  the  cash  book;  if  they  are  not  remitted,  the  consignor 
should  have  credit  on  the  ledger. 

Since  there  is  a  debit  for  every  credit  in  a  business  transaction,  it  follows  that  every  entry 
on  the  debit  side  of  a  consignment  must  have  an  equal  amount  credited  either  in  cash  or  in 
some  ledger  account.  Care  should  be  exercised  in  making  entries  in  the  consignment  account, 
to  write  in  the  first  part  of  the  explanation  column  the  opposite  title  or  titles  affected  by  each 
entry. 

Since  a  consignment  has  debits. and  credits,  like  a  ledger  account,  it  follows,  that  when 
a  consignment  account  is  not  in  balance,  its  total  debits  and  credits,  or  the  difference  between 
them,  should  appear  on  our  proof  sheet. 

Consignments  for  sale  on  joint  account,  called  Merchandise  Companies,  are  entered  in 
the  commission  sales  book  the  same  as  consignments,  except  that  the  joint  risk  requires  the 
commission  merchant  to  estimate  the  profit  or  loss  of  each  firm  interested  before  finding  the 
consignor's  net  proceeds. 

Sometimes  it  becomes  necessary  for  the  commission  merchant  to  remit  to  the  consignor, 
or  to  give  him  credit  for  his  share  of  the  invoice  of  a  joint  consignment  before  it  is  sold.  In 
such  case  the  amount  allowed  should  be  entered  as  a  debit  to  the  consignment  in  the  com- 
mission sales  book. 

It  would  be  well  to  reserve  the  first  .set  of  money  columns  on  the  debtor  page  of  the  com- 
mission sales  book  for  the  charges  pertaining  to  each  consignment,  reserving  the  other  set  of 
columns  for  remittances,  total  charges,  and  net  proceeds  at  closing. 

The  entries  on  the  debit  side  of  the  commission  sales  book  are  usually  either  debits  from 
the  cash  book,  or  original  entries  consisting  of  charges.  A  check  mark  should  be  placed 
opposite  the  cash  entries  in  the  folio  column,  and  the  other  entries  should  be  postmarked  with 
the  folios  of  the  ledger  accounts  to  which  the  corresponding  credits  are  carried. 

If  the  journal  is  kept  as  in  Set  Six,  with  a  special  column  for  merchandise  debits,  we  can 
reduce  the  posting  of  merchandise  debits  and  credits  to  one  entry  each  in  the  ledger.  In  a 
compound  transaction,  such  as  the  joint  shipment  to  Dowles  &  Long,  we  should  enter  all  items 
pertaining  to  the  invoice  in  our  general  sales  book,  which  will  credit  merchandise  for  the  entire 
amount,  and  to  make  the  merchandise  account  correct,  we  must  debit  it  in  the  journal  for  both 
the  freight  and  the  drayage. 

The  cash  book  may  be  kept  by  any  of  the  methods  already  illustrated.  If  no  other 
method  is  preferred,  we  would  suggest  the  use  of  special  cash  and  bank  columns,  the  same  as 
in  Set  Four. 

In  recording  the  transactions,  the  student  will  enter  cash  receipts  and  payments  at  once 
in  the  cash  book,  all  sales  in  the  general  sales  book,  charges  on  consignments  in  the  com- 
mission sales  book,  and  other  debits  and  credits  in  the  journal,  being  careful  to  give  every 
title  that  requires  debit  or  credit  from  the  several  books,  and  checking  every  entry  that  does 
not  require  posting  to  the  ledger. 

All  sales  of  commission  goods  are  afterward  carried  to  the  commission  sales  book,  and 
the  same  checked  in  the  folio  column  of  the  general  sales  book. 

The  work  of  posting  from  four  different  books,  each  of  which  contains  some  original 
entries,  calls  for  very  careful  attention  on  the  part  of  the  accountant,  and  we  recommend  the 
same  to  the  student  as  most  excellent  drill  in  the  concentration  of  his  mind  upon  his  work. 

As  the  credit  entries  in  the  commission  sales  book  have  their  corresponding  debits  posted 
to  cash  book  or  ledger  from  the  general  sales  book,  the  student  can  make  it  a  rule  in  this  sys- 
tem to  post  no  debits  from  the  creditor  page  of  the  commission  sales  book.  There  may  be  an 
occasional  loss  entry  required  as  a  closing  credit  in  a  joint   consignment,   as    in   Mdse.   Co.  A, 


BOOKKEEPING  FOR  COMMISSION  MERCHANTS.  163 


which  will  be  posted  to  the  debit  of  Loss  and  Gain  in  the  ledger  direct  from  the  commission 
sales  book,  such  entries  being  made  with  red  ink  in  the  commission  sales  book,  thus  insuring 
their  entry  in  the  ledger. 

To  insure  uniformit)'  in  ledger  results,  the  student  should  make  it  a  rule  to  post  the  ledger 
at  the  close  of  each  date,  after  all  transactions  are  recorded  for  the  day,  posting  from  the 
journal,  cash  book,  general  sales  book,  and  commission  sales  book  in  the  order  named. 

In  the  forms  we  illustrate  a  method  of  keeping  a  number  of  one  line  accounts  under  the 
title  Sundry  Accounts.  This  method  is  used  by  accountants  when  they  have  persons  to  debit 
or  credit  who  are  not  likely  to  require  regular  accounts.  A  single  line  is  given  to  each  of  these 
persons,  and  if  he  is  to  be  credited,  his  name  is  written  in  the  explanation  column  of  the  credit 
side,  with  the  date  and  page  of  the  book  from  which  the  account  is  posted.  The  Ime  on  the 
debit  side  is  left  vacant  until  such  time  as  we  wish  to  debit  the  same  firm.  If  such  a  firm  is  to 
be  debited  first,  his  name  will  be  written  in  the  debit  side,  and  the  credit  side  will  be  left  vacant 
until  his  account  requires  a  credit.  By  looking  over  this  sundry  page,  we  can  readily  find  the 
unsettled  accounts.  In  the  account  illustrated,  C.  C.  Smith  has  an  unsettled  credit,  which  the 
student  will  balance  with  a  debit  found  in  one  of  the  closing  transactions. 

Occasionally  one  of  these  transient  accounts  will  not  be  closed  by  a  single  transaction,  as 
in  the  case  of  R.  M.  Gaston.  We  have  paid  him  in  two  installments,  and  we  must  enter  two 
debits  on  the  line.  In  such  case  we  can  enter  the  date  of  settlement  in  the  date  column,  and 
extend  the  total  of  the  installments  in  the  amount  column,  thus  showing  the  account  in  balance. 

TRANSACTIONS. 

DECE.MBE,R  10,  189 

Began  the  commission  and  forwarding  business  with  the  following  resources  and  liabilities: 

Resources. — Balance  of  account  from  James  Lee  ^64.01,  cash  on  hand  ^$45. 22,  cash  in 
bank  ;^i. 852.47,  bills  receivable  ^77.48,  rent  and  other  expense  items  prepaid  ^123.25,  merchan- 
dise on  hand  ;$3,i5i.20 

Liabilities. — Balances  of  account  favor  H.  Perkins  ^4.08,  favor  Mead  &  Spencer  $467.96, 
favor  H.  R.Baker  $377.60,  bills  payable  $575,  due  on  bookkeeper's  salary  and  advertising 
(expense  items  not  yet  paid)  $26.75. 

[We  will  give  the  amount  and  maturity  of  all  notes,  as  they  are  collected  or  paid,  in  order 
that  the  bill  book  may  be  omitted  in  this  set.] 

Sold  our  entire  stock  of  merchandise  to  H,  Eastman  for  $3,275.  Eastman  has  assigned  to 
us  in  part  payment  the  following  accounts  due  him:  Henry  Martin  $300,  M.  Edwards,  $150, 
C.  Brown  $19,  H.  Horton  $198,  James  Wiley  $13.50.  He  has  also  given  us  a  note  for  $16.50, 
signed  by  George  Strand  and  indorsed  by  H.  Eastman;  cash  $500;  250  cwt.  flour  @  $3;  and 
we  have  charged  the  balance  to  his  account.  [As  Martin,  Edwards,  Brown,  Horton,  and  Wiley 
are  not  regular  customers,- the  student  may  carry  these  names  to  Sundry  Accounts  in  the 
ledger,  instead  of  giving  each  of  them  a  separate  title.] 

Received  per  B.  C.  Railway,  from  Barrett  &  Smith,  Oxford,  to  sell  on  their  account  and 
risk,  500  bu.  wheat.  .  .  .Paid  cash  for  freight  on  the  wheat  $40. 

Received  per  Com.  Railway,  from  H.  A.  Morey,  Collegeville,  40  tubs  butter,  2,250  lbs.,  to 
sell  oti  his  account  and  risk.  .  .  ,  Paid  cash  for  freight  on  the  butter,  $5.65  .  .  .  .Advanced  cash  to 
H.  A.  Morey,  to  apply  on  his  consignment,  $200. 

Paid  cash  for  postage  and  stationery  for  office  use,  $12.75. 

Received  cash  in  full  of  C.  Brown's  account. 

Deposited  cash  in  bank  $250. 

Bought  of  H.  S.  Parton  3,000  lbs.  wool  ©25  cents,  giving  our  check  for  the  same. 

I  I 

We  were  offered  $3.10  per  cwt.  for  the  250  cwt.  flour  which  we  bought  of  Eastman  yes- 
terday, but  thinking  v;e  could  find  a  better  market,  we  have  this  day  shipped  the  entire  amount 
to   Raymond  &  Co.,  St.  Louis,  to  sell  on  our  account  and  risk.     jDesirmg  to  know  the  gain  on 


1 64  HIGHER  A  ceo  UNTING. 

this  special  shipment,  the  student  may  open  an  account  with  "Shipt.  R.  &  Co.,"  debiting  the 
same  with  the  flour  at  ;^3.io  per  cwt.,  and  also  with  all  other  expenses  pertaining  to  the  ship- 
ment.]. .  .  .Paid  freight  on  the  flour  by  check  tj^. 

Received  per  Commercial  Railway  a  consignment  of  Flour  from  Crescent  Mills,  Akron,  to 
be  sold  on  their  account  and  ri'Sk,  600  sacks,  with  instructions  to  sell  at  not  less  than  ;$i.5  5  per 
sack, . .  .Paid  cash  for  freight  on  flour  ;^i8. 

Received  cash  in  payment  of  Geo.  Strand's  note  ;^  16.50. 

Sent  Mead  &  Spencer,  a  bank  draft  to  apply  on  account,  $350.  .  .  .Gave  check  for  the 
draft,  and  for  exchange  75  c. 

Gave  a  check  to  pay  our  note  favor  Mead  &  Spencer,  due  this  day,  and  left  at  our  bank 
for  collection,  ;$200. 

Bought  of  R.  M.  Gaston  6,000  lbs.  wool  @  25,^  cts.,  giving  our  check  for  ^500,  balance 
on  account.  .  .  .[Post  Gaston's  credit  in  Sundry  Accounts.] 

Bought  of  Howard  &  Parks,  2,000  lbs.  wool  C«^  25  cts.,  giving  them  our  check  for  $400,  and 
our  order  on  H.  Eastman  for  the  balance. 

Received  from  J.  Lane,  Union  City,  per  Commercial  Railway,  to  be  sold  on  his  account 
and  risk,  1,000  doz.  Eggs,  50  boxes  cheese.  . .  .Paid  freight  by  check  ^17.50. 

Bought  of  C.  C.  Smith,  on  account,  50  bbls.  cranberries  @  ;^5.50.  .  .  .Gave  our  check  for 
freight  on  the  cranberries,  ^25.     [Post  Smith  in  Sundry  Accounts.] 

Received  from  P.  R.  Sanford,  Creston,  per  Air  LineR.  R.,  freight  prepaid,  to  sell  on  his 
account  and  risk,  900  bu.  shelled  corn,  invoiced  at  33  cents. 

Shipped  to  Dowles  &  Long,  Chicago,  to  be  sold  on  their  and  our  joint  account,  each  ^, 
11,000  lbs.  wool,  invoiced  at  26c.  We  also  included  in  the  invoice  freight  $30,  which  we  have 
prepaid  by  check,  and  drayage,  which  we  have  credited  to  Drayage  account,  1^2.50.  [Debit 
Shipment  Co.  i  with  our  y^,  and  Dowles  &  Long  with  their  )^.] 

Drew  on  Dowles  &  Long  at  3  days'  sight  draft  for  the  amount  of  their  ^  invoice  of  wool 
shipped  them  this  day.  (This  does  not  become  a  transaction  until  they  pay  or  accept  the 
draft,  or  we  dispose  of  it  to  a  third  party;  hence  we  need  no  record  except  a  memorandum  for 
reference  in  the  journal.) 

Sold  Union  Mills  for  cash  300  bu.  wheat  (B.  &  S.'s  const.)  @  95c.,  200  bu.  corn  (P.  R.  S. 

const.)   @   42c Sold  A.  M.  Preston  25  tubs  butter  (H.  A.  M.'s  const.)  1,400  lbs.  @  iS}4c., 

5  boxes  cheese  (Lane's  const.)  205  lbs.  @  I2^c,,  2  bbls.  cranberries  (Mdse.)  @  ;^8;  receiving 
cash  $17 S>  ^"d  his  note  at  one  day  for  the  balance. 

Deposited  cash  in  bank.  ;^500. 

12 

Sold  Lee  &  Somers,  for  cash,  200  bu.  wheat  (B.  &  S.'s  const.)  (a)  96c Sold  R.  E.  Wilson, 

on  account,  150  sks.  flour  (Cres.  M.'s  const.)  @  $1.60;  100  doz.  eggs  (Lane's  const.)  @  i8c. 
Sold  C.  E.  Rogers,  for  cash,  5  tubs  butter  (H.  A.  M.'s  const.)  260  lbs.  (ni  19c.;  5  bbls.  cran- 
berries (Mdse.)  @  $S;  150  doz.  eggs  (Lane's  const.)  @  iS^^c. 

Dowles  &  Long  have  returned  our  draft  on  them  accepted,  the  acceptance  being  for 
;^ 1, 446.2 5,  and  dated  iith  inst. 

Accepted  H.  R.  Baker's  draft  on  us  at  3  days,  payable  at  College  Bank,  for  $2QO,  to  apply 
on  account. 

Received  cash  of  H.  Eastman  to  apply  on  his  account,  ^800. 

Paid  cash  for  i  month's  rent  of  warehouse  for  storing  merchandise  and  produce,  $75. 
[Debit  this  outlay  to  Storage,  as  a  part  of  the  outlay  for  rent  will  be  received  back  from  the 
consignors  in  our  charges  for  storing  their  property,  which  will  be  credited  to  Storage.] 

Paid  cash  for  gas  bill  ^3.75. 

Closed  Barrett  &  Smith's  consignment,  sending  them  an  account  sales.  Charged  them  for 
commission  ;^5,  drayage  ^2.50,  storage  ;^i.25.     Remitted  net  proceeds  per  certified  check. 

Received  per  B.  C.  Railway  from  Howard  Thompson,  Jacksonville,  to  be  sold  on  his 
account  and  risk,  200  bbls.  apples Paid  cash  for  freight  on  the  apples  $50. 

Received  cash   of  Henry  Martin   on  account  ^300,  of  H.  Horton  1^198,  and  James  Wiley 

;^i3-5o. 


BOKKEEPING  FOB  COMMISSION  MEBCHANTS.  165 

Gave  a  check  to  pay  our  note  favor  of  C.  Curtis,  due  this  day,  ^350. 

Bought  of  A.  E.  Thomas  7,000  lbs.  butter  @  iq^c,  giving  him  our  check  for  ;^500,  an 
order  on  M.  Edwards  for  $150,  and  our  note  at  5  days  for  the  balance. 

Bought  of  John  Newton  for  cash  2,000  lbs.  butter  @  19c. 

Deposited  cash  in  bank  ^$1,100.  .  .  .Cash  on  hand  amounts  to  ;^i  10.22.  .  .  .Balance  of  cash 
in  bank  is  $T^.^'J.     The  student  may  prove  and  balance  his  cash  book. 

13 

Bought  of  James  Lee,  of  Vinton,  on  account,  1,000  lbs.  butter  @  20c. 

Bought  of  Geo.  Norton,  on  account,  200  boxes  cheese,  10,800  lbs.  @  \o]A,c.  .  .  .Paid  cash 
for  freight  on  cheese  ^36. 

Paid  College  Insurance  Co.  cash  for  premium  for  insuring  any  merchandise  that  may  be 
in  our  possession  in  our  warehouse,  to  the  amount  of  ;?$3,ooo  at  lyi  percent.  [Debit  Insurance, 
as  part  of  this  outlay  will  be  received. back  in  our  charges  for  insurance.} 

Sold  R.  E.  Wilson,  on  account,  400  doz.  eggs  (J.  L.'s  const.)(6/;  19c.,  10  boxes  cheese  (J.  L.'s 

const.)   412  lbs.  @    I2j4c.,    10  tubs  butter  (H.  A.  M.'s  const.)  590  lbs.  @  i83/(c Sold  H. 

Perkins  100  bbls.  apples  (H.  T.'s  const.)  @  ;^2.6o,  15  bbls.  cranberries  (Mdse.)  @  $7.90,  20 
boxes  cheese  (J.  L.'s  const.)  840  lbs.  (?/)  I2)_(c.;  receiving  cash  ^lOO,  balance  on  account,  . . . 
Sold  C.  A.  Carter,  for  cash,  15  boxes  cheese  (J.  L.'s  const.)  620  lbs.  (a]  12c.,  5  bbls.  cranberries 
(Mdse.)  @  ^8. 

Shipped  10,000  lbs.  butter  to  Raymond  &  Co.,  St.  Louis,  to  sell  on  their  and  our  joint 
account  and  risk,  each  }4,  invoiced  ^  2ic.  [Debit  Shipt.  Co.  2  with  our  )4 ,  and  Raymond  & 
Co.  with  their  ^  of  this  invoice.] 

Received  per  B,  C.  Railway  from  A.  Leonard  &  Co.,  Goldfield,  1,000  bu.  potatoes,  invoiced 
at  25c.,  v/hich  we  have  arranged  to  sell  on  joint  account  and  risk,  they  ^  and  we  }4  -  ■  ■  -Gave 
our  check  for  freight  on  the  potatoes  ;^50. 

Raymond  &  Co.  have  sent  us  a  bank  draft  for  ^500,  as  part  proceeds  of  the  flour  shipped 
to  them  for  sale  on  the  i  ith  inst. 

Closed  H.  A.  Morey's  consignment,  sending  him  an  account  sales,  and  charging  him  for 
storage  ;^i.50,  drayage  $1,  commission  ;^i  1.25,  and  placing  net  proceeds  to  his  credit. 

Drew  on  Raymond  &  Co.  for  ^1,000  to  apply  on  their  }4  invoice  of  the  joint  shipment  of 
butter  made  today.     Sold  the  draft  for  cash  ^994,  discounting  the  balance. 

Deposited  cash  in  bank  ;^  1,600. 

15 

Received  advice  from  Dowles  &  Long,  of  the  sale  of  wool  shipped  them  i  ith  inst.;  our  ^ 
net  proceeds  being  ;^  1,720,  of  which  they  sent  us  cash  ;^  1,420,  leaving  the  balance  to  our  credit. 

Sold  H.  R.  Baker,  Blairstown,  on  account,  20  boxes  cheese  (Mdse.)  1,080  lbs.  @  13c.,  10 
bbls.  cranberries  (Mdse.)  (6/)  ^8.10,  50  bbls.  apples  (H.  T.'s  const.)  @  $2.65 ...  .Sold  James 
Murray  for  cash,  30  boxes  cheese  (Mdse.)  1,620  lbs.  @  I2}^c.,  200  sacks  flour  (Cres.  M.'s. 
const.)  @  ;^i.5  5,  300  bu.  corn  (P.  R.  S.'s  const.)  @  42c.  .  .  .Sold  Charles  Carey  400 bu.  potatoes 
(Mdse.  Co.  A.)  ^  33c.,  7  bbls.  cranberries  (Mdse.)  @  ^^8.05,  receiving  cash  ;^50,  and  his  note 
at  10  days  for  the  balance. 

Accepted  draft  at  3  days  drawn  on  us  by  the  Crescent  Mills,  in  favor  of  M.  A.  Parsons, 
for  ^400  to  apply  on  their  consignment. 

Sent  A.  Leonard  &  Co.  a  draft  in  payment  of  our  ^  invoice  of  potatoes,  $\2^.  .  .  .Gave 
check  for  the  draft,  and  for  exchange  on  the  draft  25c. 


i66 


HIGHER  ACCOUNTING. 


LEFT  FOLIO  OF  THE  COnniSSION  SALES  BOOK. 


No.  2 


H.  A.  MO  REV. 


189- 

Dec. 

10 
13 

Per  Commercial  Railway. 
40  tubs  Butter,  2250  lbs.,  not  invoiced 

5 

I 

I 

II 

C5 

25 

2CO 

IQQ 
419 

Cash— Paid  Freight 

Cash — Advanced  on  proceeds 

Storage 

Drayage 

Commission 

H.  A.  Morey — Net  proceeds  on  account 

40 

(>3 
03 

No.  y. 


189- 
Dec. 


MDSE.  CO.  A.— A.  LEONARD  &-  CO. 
Leonard  &  Co.  Yi,  and  ourselves  Yz. 


Per  Business  College  Railway. 

1000  bu.  Potatoes,  invoiced  .25.  

Cash — Paid  Freight 

Cash — Paid  our  %.  of  invoice 

Storage 

Drayage 

Commission 

Cash— Check  for  Net  Proceeds 


$250 


50 


125 

15 

5 

2S 

95 

120 

50 

340_ 

50 

THE  GENERAL  SALES  BOOK. 
Dec.  10,  189- 


Whose 
Consign- 
ment. 


B.  &  S. 
P.  R.  S. 


H.  A.  M. 
J.  L. 


Folio, 


c. 


c. 
19 


Sold  H.  Eastman  all  merchandise  on  hand — See  Tournal. 

II i_ 


Sent  Raymond  &  Co.,  St.  Louis,  to  sell  on  our  acct.  and  risk, 

250  cwt.  Flour,  invoiced  ^  $->  10 

Acct.  Shipt.  R.  &  Co. 


Shipped  to  Dowles  &  Long,  Chicago,  to  sell  on  their  and  our 
joint  account,  each  Yi, 

11,000  lbs.  Wool,  invoiced  @  .26 

Freight  on  same 
Drayage         " 
Shipment  Co.  i  $1446.25 

Dowles  &  Long  1446.25; 


Sold  Union  Mills.  City. 
300  bu.  Wheat 
200    "  Corn 
Received  Cash 

Sold  A.  M.  Preston,  City, 
25  tubs  Butter,  1400  lbs. 
5  boxes  Cheese,  205    " 
2  bbls.  Cranberries 

Received  Cash 

Note  I  day  for  bal. 


i8>^ 
8.00 

$175-00 
125.63 


Consign- 

I'.l'.MU. 


285 
84 


259 
25 


653 


Merchan- 
dise, 


3275 

775 


63 


63 


16 


Totals 
3275 

775 


2860 

30 

2 

50 

2892 


50 


369 


300 


6958  50  !i  7612 


63 


13 


BOOKKEEPING  FOR  COMMISSION  MERCHANTS. 


167 


RIGHT  FOLIO  OF  THE  COHHISSION  SALES  BOOK. 


COLLEGE  VILLE,  ( 1  'our  State.) 


i8q- 
Uec. 

11 
12 

13 

25  tubs  Butter,  1400  lbs., 

5   "     "   260   " 

10   "    "   590   " 

•19 

.18^ 

1 

259 
'49 

IIO 

10 
'^3 

419 

<33 

189- 

Dec. 


GOLDEIELD,  {Your  State. 


400  bu.  Potatoes, 

350     " 

250     " 

Loss  and  Gain — Our  ',<  Net  Loss 


•33 
•34 
•34 


TWO  ACCOUNTS  FROM  THE  GENERAL  LEDGER. 

SUNDRY  ACCOUNTS. 


"3^ 

lU) 

8S 
4 


340 


50 


50 


iSq- 

Dec. 

10 

10 

10 

10 

10 

Dec. 

17 

Henry  Martin,  J. 
M.  E.  Edwards,  J. 
C,  Brown,  J. 
H.  Horton,  J. 
James  Wiley,  |. 
C}iS530.  CH§Soo 


i8q-- 

300 

Dec. 

12 

150 

12 

.  ^9 

10 

198 

12 

13 

50 

12 

7 

1030 

II 
II 

Cash 

Journal 

Cash 

Cash 

Cash 

R,  M.  Gaston,  J. 

C.  C.  Smith,  J. 


6 

300 

4 

150 

6 

19 

6 

198 

8 

13 

I 

1030 

4 

275 

50 


STORA  GE. 


l8q- 

i8g- 

Dec. 

12 

Rent  of  Warehouse,  C 

5 

75 

Uec. 

10 

Const.  N 

0.  I 

2 

I 

25 

18 

Loss  and  Gain 

■ 

30 

25 

25 

13 
16 
16 
17 
17 
18 

Journal 

*  0 

'  3 
'  4 
'  5 
'  6 

'  7 

•  8 

2 

2 

4 
4 
4 
6 
6 
8 

I 
6 
2 

4 
12 

15 
1 

55 

50 
25 
75 
50 
75 

25 

100  * 

25 

100 

25 

^ 

1 68  HIGHER  ACCOUNTING. 


Cashed  Moray's  sight  draft  on  us  to  apply  on  his  account,  $50. 

Paid  for  advertising  to  date  $17,50.     [Debit  Expense.] 

Paid  drayage  bill  to  date  ^12.75.     [Debit  Drayage.J 

Received  Raymond  &  Co.'s  account  sales  of  the  flour  shipped  to  them  on  the  nth  inst. 
Our  entire  net  proceeds  were  ^990,  of  which  they  remitted  ;$500  on  the  13th  inst.,  leaving  the 
balance  to  our  credit. 

Gave  R.  M.  Gaston  our  check  to  apply  on  his  account,  $530. 

Deposited  cash  in  bank  ;^2,ioo. 

Cash  on  hand  this  evening  amounts  to  $69.92,  and  in  bank,  $3,070.72. 

[Make  a  proof  sheet  before  advancing  further,  using  the  cash  balance,  bank  balance,  and 
the  unbalanced  consignments  and  ledger  accounts.] 

16 

Sold  R.  A.  Martin  on  his  note  at  3  days,  1  50  sacks  flour  (Cres  M.'s  const.)  @,  $1.60,  400 
bu.  corn    (P.  R.    S.'s  const.)  @  42^c.  .  .  .Sold  H.  Perkins,  on  account,  100  sacks  flour  (Cres. 

M.'s  const.)  @  $1.55;  25  boxes  cheese  (Mdse.)  1,350  lbs.  @  13c Sold  Meade  &  Spencer,  on 

account,  50  bbls.  apples  (H.  T.'s  const.)  @  $2.70;  7  bbls.  cranberries  (Mdse.)  @  $8.20. 

Received  cash  for  the  proceeds  of  Dowles  &  Long's  acceptance,  $1,444,  the  bank  charg- 
ing $2.25  for  collecting  the  same. 

Paid  Howard  Thompson's  draft  on  us  for  $150  by  check,  to  apply  on  the  proceeds  of  his 
consignment. 

Received  cash  in  payment  of  A.  M.  Preston's  note,  given  i  ith  inst.,  $125.63. 

Closed  Crescent  Mills'  consignment,  and  rendered  an  account  sales,  charging  them  for 
storage  $6.25,  drayage  $3.25,  insurance  one-tenth  per  cent  of  entire  amount  of  sales,  commis- 
sion 2  cents  per  sack;  sending  their  net  proceeds  by  check. 

Paid  cash  for  bookkeeper's  salary  to  date  $25. 

Paid  cash  for  stationery  $5.75. 

Received  per  Commercial  Railway  from  Fowler  &  Co..  Muscatine,  200  baskets  grapes,  to 
be  sold  on  their  and  our  joint  account,  theirs  ^  and  ours  3^,  invoiced  2,500  lbs. @ 6c.  .  .  .Gave 
check  for  their  sight  draft  on  us  for  our  V-x^  invoice,  $50.  .  .  .Paid  cash  for  express  charges  on 
the  grapes,  $12.50.     [Enter  as  Mdse.  Co.  B.] 

Closed  J.  Lane's  consignment  and  rendered  an  account  sales;  350  doz.  eggs  were  unsal- 
able. Charged  him  for  storage  $2.75,  drayage  $[.25,  insurance  63c.,  commission  $18.80;  send- 
ing him  our  check  for  net  proceeds. 

Drew  on  Raymond  &  Co.  at  sight  for  the  balance  due  us  on  the  proceeds  of  flour,  and  sold 
the  draft  for  cash  $480. 

Received  cash  of  H.  Eastman  to  apply  on  account  $100. 

Deposited  cash  in  bank  $2,000. 

17 

Sold  H.  R.  Baker,  on  account,  50  boxes  cheese  (Mdse.)  2,700  lbs.  @  I2j4c-'y  20  baskets 
grapes  (Mdse.  Co.  B.)  250  lbs.  ^)  ioc....Sold  James  Turner,  for  cash,  350  bu.  potatoes  (Mdse 
Co.  A.)  @  34c.;  50  baskets  grapes  (Mdse.  Co.  B.)  625  lbs.  @  9c.  ..  .Sold  James  Lee,  of  Vinton) 
25  boxes  cheese  (Mdse.)  i,350*lbs.  @  13c;  5  bbls.  cranberries  (Mdse.)  @  $7.90;  80  baskets 
grapes  (Mdse.  Co.  B.)  1,000  lbs.  @  8j^c.;  receiving  cash  $150,  balance  on  account. 

Closed  H.  Thompson's  consignment,  sending  him  an  account  sales.  Charged  for  storage 
$12.75,  drayage  $3.75,  insurance  )^  per  cent  of  entire  sales,  commission  7^c.  per  bbl....Sent 
him  our  check  for  his  proceeds. 

Received  advice  from  Raymond  &  Co.,  of  the  sale  of  our  shipment  of  butter,  our  share 
of  the  net  proceeds  being  placed  to  our  credit,  $1,125. 

Received  cash  of  Dowles  &  Long  on  account  $200. 

Gave  R.  M.  Gaston  our  check  for  balance  of  his  account,  $500, 

Deposited  cash  in  bank,  $650. 

Closed  P.  R.  Sanford's  consignment,  sending  him  an  account  sales.  Charged  for  storage 
$4.50,  insurance  95c.,  commission  3c.  per  bu.,  and  sent  him  our  check  for  his  net  proceeds. 


BOOKKEEPING  FOR  COMMISSION  MERCHANTS.  169 

Sold  A.  C.  Sprague  &  Co.,  for  cash,  i  bbl.  cranberries  (Mdse.)  @  ;^8.io;  250  bu.  potatoes 
(Mdse.  Co.  A)  @  34c.  .  .  .Sold  J.  A.  Long,  for  cash,  50  baskets  grapes  (Mdse.  Co.  B)  625  lbs. 
@  4c.;  50  boxes  cheese  (Mdse.)  2,700  lbs.  @  I2^c. 

H.  Eastman  has  agreed  to  allow  us  ;^50  for  the  unexpired  rent  on  the  store  room,  which 
he  has  occupied  since  he  bought  our  stock  of  merchandise,  and  also  ;$37.50  for  unexpired 
insurance  on  the  merchandise,  the  policy  having  been  transferred  to  him  at  the  time  of  the 
sale.     [Debit  Eastman.] 

Closed  Mdse.  Co.  A,  sending  an  account  sales.  Charged  for  storage  ^15.  drayage  ;^5,  com- 
mission 2^c.  per  bu.,  sending  our  check  for  the  consignor's  net  proceeds  after  recording  our 
share  of  the  loss  or  gain. 

Settled  in  full  with  Geo.  Norton,  receiving  a  discount  of  ^35.56,  and  giving  him  a  siyht 
draft  on   H.  Perkins  for  the  amount  due  us  from  Perkins,  and  our  check  for  the  balance. 

The  drafts  we  drew  on  Raymond  &  Co.,  13th  and  i6th  inst.,  have  each  been  returned 
protested  for  non-payment,  and  we  have  given  our  check  to  pay  the  amount  of  the  face  of  these 
drafts  and  protest  charges,  ;^2.2  5  on  each.  Telegraphing  to  learn  the  cause  of  these  protests 
we  received  a  return  message  stating  that  Raymond  &  Co.  had  closed  insolvent,  and  that  pre- 
ferred creditors  had  claims  for  the  amount  of  all  available  resources.  The  two  drafts  are  now 
worthless  and  should  be  debited  accordingly.  . .  .Paid  cash  for  the  message  and  reply  i^i-SO. 

Closed  Mdse.  Co.  B,  sending  an  account  sales.  Charged  for  labor  of  clerks  sorting  grapes 
^3-75)  commission  2)^  per  cent  of  the  sales,  storage  $\.2^,  and  sent  them  our  check  for  their 
net  proceeds  after  entering  our  share  of  the  loss  or  gain. 

Received  cash  from  James  Lee  to  balance  his  account. 

Drew  out  cash  for  personal  expenses  ;^37.3i. 

Deposited  in  bank  all  cash  on  hand. 

Gave  C.  C.  Smith  our  sight  draft  on  Dowles  &  Long  for  ^100,  and  our  check  for  ;^  1.7 5,  to 
close  his  account. 

H.  A.  Morey  has  drawn  on  us  for  ^149.63,  and  we  have  given  our  check  to  pay  the  d-aft, 
and  exchange  on  same  25  cents. 

We  have  paid  our  notes  payable  outstanding,  giving  a  check  for  each,  as  follows :  H.  Per- 
kins $2^,  H.  R.  Baker  ^200,  A.  E.  Thomas  ;^7I5,  M.  A.  Parsons  ;^400. 

Bought  of  R.  V.  Warden  15  acres  of  land  near  the  city  limits  for  ;^2,700,  paying  for  the 
same  by  transferring  to  him  our  business,  estimating  the  reputation  and  good  will  at  ^250, 
unexpired  rent  ^55,  unexpired  insurance  ;^27.50,  books  and  stationery  ^13.25,  office  furniture 
^25.75,  balance  of  notes  receivable  due  us  ^625.83,  all  personal  accounts  due  us  at  their  face 
value,  and  our  check  for  the  remainder  of  the  consideration. 

The  proprietor  withdraws  the  balance  of  cash  and  the  real  estate  from  the  business,  esti- 
mating the  latter  at  the  same  as  he  paid  for  it. 

The  student  may  close  the  ledger,  estimating  Raymond  &  Co.'s  account  as  worthless. 


I70  HIGHER  ACCOUNTING. 


Set  Twelve. 


KEEPING  ABSTRACTS  OF  TITLE. 


Keeping  records  of  real  estate  transfers  is  a  subject  that  properly  claims  more  space  than  we  can 
give  in  this  short  chapter,  and  we  have  been  induced  to  illustrate  it  very  briefly,  not  for  the  benefit  of 
those  who  are  familiar  with  the  subject,  but  rather  as  a  matter  of  general  information  to  the  young 
accountant,  who,  we  trust,  will  be  stimulated  to  further  research  and  examination  of  the  system  of 
abstracting  used  in  his  own  county. 

.When  any  piece  of  real  estate  is  transferred  by  deed  or  mortgage,  or  when  any  lien  is  filed  upon 
such  property,  the  instrument  of  transfer  or  lien  is  copied  in  the  recorder's  book  at  the  county  seat, 
and  a  memorandum  is  sent  by  the  recorder  to  each  office  in  the  same  county  where  abstracts  of  title 
are  kept,  naming  the  date  of  the  paper  recorded,  the  names  of  the  parties  interested,  and  the  descrip- 
tion of  the  property.  If  a  mortgage  or  lien  is  afterward  satisfied  and  canceled,  such  fact  is  also  re- 
corded, and  the  same  reported  to  the  abstract  offices;  so  that  anyone  desiring  can  get  a  complete 
history  of  the  ownership  and  title  of  any  real  estate,  either  land  or  town  lot,  by  consulting  the  ab- 
stract books- of  the  county  in  which  the  property  is  located. 

Since  1802  the  United  States  surveyors  have  surveyed  land  into  tracts  six  miles  square,  called 
Government  Townships.  Each  township  is  subdivided  into  tracts  one  mile  square,  called  Sections. 
Each  section  is  subdivided  into  tracts  one-half  mile  square,  called  Quarter  Sections  For  convenience 
in  abstracting,  these  quarter  sections  are  subdivided  into  quarter-quarters  of  forty  acres  each.  These 
and  the  quarter  sections  are  described  by  the  points  of  the  compass,  as  the  N.  E.  quarter  of  the  N.  E- 
quarter  of  a  certain  section.  The  thirty-six  sections  in  each  township  are  designated  by  the  numbers 
from  1  to  36. 

A  base  line,  or  starting  point,  has  been  chosen  for  each  general  survey  of  land,  and  townships  in 
a  tier  north  or  south  of  this  line  are  nunbered  1,  2,  3,  4,  etc.  Each  tier  of  townships  is  called  a  Range 
and  these  langes  are  numbered  1,  2,  3,  4,  etc.,  East  or  West  of  Nferidians  of  Longitude  established  by 
the  surveyors  and  designated  as  Principal  Meridians.  Thus,  the  40  acres  of  land  given  in  our  ab- 
stract of  title  register,  is  the  northeast  quarter  of  the  northeast  quarter  of  Section  1,  Township  83 
North,  in  Range  7  west  of  a  Principal  Meridian;  and  these  principal  meridians  are  numbered  1,  2,  3, 
4,  5,  and  6,  for  the  states  between  the  western  boundary  of  Ohio  and  the  western  boundary  of  Dakota 
and  Nebraska.  There  are  in  all  twenty-three  principal  meridians  in  the  United  States,  the  others  be- 
ing named  from  some  geographical  point  with  which  they  are  connected. 

Towns  are  usually  surveyed  into  blocks  with  streets  intervening,  and  the  blocks  are  subdivided 
into  lots  usually  60  feet  wide,  ten  in  a  block.  Each  block  is  numbered,  and  each  lot  in  the  block  is 
also  numbered.  As  single  store  rooms  usually  have  a  frontage  of  20  feet,  they  are  designated  by  suc- 
cessive numbers  on  each  street  without  regard  to  any  particular  lot  or  block. 

If  a  town  grow  beyond  the  original  survey  of  lots,  additions  are  surveyed  into  blocks  and  lots  in 
the  same  manner,  and  these  are  designated  by  the  names  of  the  additions  to  which  they  belong. 
Page  171  represents  40  blocks  of  an  ideal  town.  College  City,  illustrating  the  block  numbers,  lot  num- 
bers, and  street  numbers. 

The  daily  register  of  transfers  on  pages  180  and  181,  represents  the  record  of  transfers  like  a  day 
book  in  the  order  of  their  occurence  without  being  classified.  The  abstract  register  above  illustrates 
one  method  of  grouping  all  the  records  pertaining  to  a  particular  piece  of  property,  large  books  being 
used  and  prepared  so  as  to  contain  a  special  place  for  every  forty- acre  tract  of  land  and  every  town 
lot  in  the  county.  From  this  abstract  register  a  complete  history  of  all  transfers  pertaining  to  a  given 
piece  of  property  (called  an  Abstract  of  Title)  can  be  copied  in  a  very  short  time. 

The  index  to  transfers,  given  at  the  bottom  of  these  pages,  illustrates  a  more  condensed  method 
of  grouping  the  transfers  pertaining  to  a  given  piece  of  property.  This  consists  of  two  horizontal 
lines  assigned  to  each  piece  of  property,  these  lines  being  subdivided  into  small  spaces.  In  the 
upper  line  is  entered  merely  the  page  of  the  daily  register  in  which  a  transfer  is  recorded  pertaining 
to  the  given  property,  and  on  the  line  below  is  entered  the  number  of  the  line  in  which  this  record  may  be 
found  in  the  register.  In  writing  an  abstract  of  title  from  the  index  book,  we  would  be  cornpelled  to 
trace  up  each  transfer  from  index  to  daily  register,  and  make  our  abstract  from  these  entries.  The 
index  system  requires  less  time  and  space  in  classifying  or  grouping  the  transfers  than  the  abstract 
register;  but  the  latter  requires  much  less  time  for  drawing  off  an  abstract  of  title. 


KEEPING  ABSTRACTS  OF  TITLE. 


171 


m^ 


m^ 


fe 


¥0 


■m 


^M 


■in 

331 


M 


L    W 


3JA O- 


^ 


^1 


ti^ 


-^"i^. 


^ 


2J1 ^ 


^\x-s\ 


^\v<ic\ 


i=^ 


B 


^ 


^ 


^ 


•^\xee\ 


S 


^ 


# 


±L 


^ 


^ 


^ 


S 


%i  rO 


sr 


:^ 


^ 


^ 


e 


i 


£ 


:;^ 


:± 


a^^^ 


^ 


^ 


^^=^ 


-z^ 


:# 


s 


^S 


172 


HIGHER  ACCOUNTING. 


Folio  J 2 


ABSTRACT  OF 


Grantor 

Henry  V.  White 

C.  A.  Curtiss 

Grantee 

C.  A.  Curtiss    , 

Henry  V.  White 

Lot  5 
Rlork  -yfi 

Date  of  Record 

189-  June  2 

189- June  2 

Central  Park  Addition 

Date  of  Instrument 

189-  May  30 

189-  May  30 

Kind  of  Instrument 

Warranty  Deed 

Mortgage 

Consideration 

$1000 

$600 

* 

Grantor 

United  States 

Harvey  Pratt 

Grantee 

Harvey  Pratt 

George  Starks 

• 

N.E.  X 
N.E.  X 
Section  i 

Date  of  Record 

1865  Feb.  2                1     189-  June  17 

Date  of  Instrument 

1865  Jan.  3o                     189-  June  16 

83-7  West 

Kind  of  Instrument 

Patent 

Mortgage 
$1000 

Consideration 

Folio  10 


DAILY  REGISTER  OF  REAL 


Date  Filed. 

V 

a 

I 
2 

3 

4 

_5_ 
6 

7 
8 

9 
10 

Grantor. 

Grantee. 

Kind  of  Instrument 

Consid- 
eration. 

Date  of  Instniment. 

189- 

June 

2 

Henry  V.  White 

C.  A.  Curtiss 

Warranty  Deed 

1000 

189- 

May 
May 
June 

30 

189- 

June 

2 

C.  A.  Curtiss 

Henry  V.  White 

Mortgage 

600 

189- 

30 

189- 

June 

4 

Union  R.  Est.  Co. 

S.  I.  Lindsay 

Warranty  Deed 

800 

189- 

2 

189- 

June 

7 

S.  I.  Lindsay 

W.  H.  Whigam 

Warranty  Deed 

500 

189- 

June 

4 

189- 

June 

14 

Union  R.  Est.  Co. 

B.  B.  Euston 

Warranty  Deed 

2000 

189- 

June 

6 

18^ 

June 

30 

B.  B.  Euston 

G.  W.  Hootman 

Warranty  Deed 

750 

189- 

June 

24 

. 

— 



Folio  52. 
Block  26. 


TOWN  LOT  INDEX  TO  REGISTER   OF  TRANSFERS. 


N.  M 

10 

10 

• 

3 

4 

.  1 

10 
3 

s.  M 

N.^ 

10 

10 

5 

6 

t  c.  >^ 

10 

5 

^  S.  K 

10 

5 

Lot  3 

• 

Lot  4 

• 

Lot  5 

10 

10 

1 

2 

KBEPiNG  ABSTRACTS  OF  TITLE. 


173 


TITLE  REGISTER. 


ESTATE   TRANSFERS. 


Where 
Recorded. 

Town. 

Description. 

Folio. 

Book    I2Q 

Page  37 

College  City 

Lot  5,  Block  26,  Central  Park  Addition 

52 

"       129 

"       38 

College  City 

Lot  5,  Block  26,  Central  Park  Addition 

52 

"       129 

"      39 

College  City 

N  K  &  C  K  of  Lot  I,  Block  26,  C.  P.  Addition 

52 

"       129 

"       41 

College  City 

N  >^  of  Lot  I,  Block  26.  C.  P.  Addition 

52 

"        129 

"       50 

College  City 

All  of  Lot  2,  Block  26,  C.  P.  Addition 

52 

"        129 

"      55 

College  City 

N  >^  of  Lot  2,  Block  26,  C.  P.  Addition. 

52 

Township  83  North 
Range  7  West 


LAND  INDEX  TO  REGISTER  OF  TRANSFERS. 


N.E.X 

I 

120 

I 

« 

I 

0 
1) 

S.  E.  % 

C/0 

-^ 

s.w.  X 

W 

55 

N.  W.  X 

N.  E.  % 

„• 

<j 

S.E.X 



C/2 

X 

s.  w.  X 



w 

C/) 

N.  W.  X 

1 74  HIGHER  A  CCO  UN  TIP  G. 


Set  Thirteen. 


REAL  ESTATE,  BUSINESS. 


We  have  planned  the  following  set  to  illustrate  the  cash  journal,  which  is  a  cash  book  in 
which  all  debits  and  credits  are  recorded,  even  if  they  do  not  represent  cash  transactions. 
This  method  is  especially  fitted  to  the  real  estate  business,  and  is  equally  well  adapted  to  any 
kind  of  business  in  which  the  transactions  are  largely  for  cash. 

We  can  credit  any  title  by  entering  it  on  the  debtor  page  of  cash,  and  if  cash  was  not 
received  for  it,  we  can  debit  the  proper  title  by  entering  it  on  the  creditor  page  of  cash. 
Thus,  in  the  first  entry  we  credit  Capital  Stock  by  entering  it  on  the  debtor  page,  and  we  debit 
Stockholders  by  entering  that  title  on  the  creditor  page.  The  debit  and  credit  being  equal, 
the  cash  balance  remains  unchanged.  In  the  purchase  of  real  estate,  March  8,  we  debit  that 
title  by  entering  the  entire  amount  of  the  purchase  on  the  creditor  page  of  cash,  and  we  credit 
Bills  Payable  by  entering  the  amount  of  the  notes  on  the  debtor  page  of  cash.  The  difference 
between  the  debit  and  credit  of  cash  will  be  the  cash  actually  paid  out. 

By  the  use  of  special  columns  in  the  cash  book  for  the  amounts  of  such  titles  as  are 
frequently  repeated,  and  by  posting  the  totals  of  these  special  columns  at  the  end  of  each 
month,  the  accountant  can  save  more  than  half  of  the  posting. 

If  the  cash  balance  is  required  at  any  time,  each  special  column  can  be  added  as  far  as 
the  date  required,  and  the  amount  extended  to  the  general  column  opposite  the  last  entry 
added.  A  line  should  be  ruled  across  the  special  column  under  the  last  number  added,  so 
that  entries  after  this  date  can  be  added  in  the  next  amount  that  is  extended.  After  the 
footings  of  the  special  columns  are  extended  to  the  general  column,  the  cash  balance  can  be 
tested  by  finding  the  difference  between  the  small  footing  figures,  as  illustrated  in  the  cash 
book  at  the  close  of  March  I2. 

The  footings  of  each  special  column  should  be  carried  -forward  from  page  to  page  until 
the  close  of  the  month,  when  they  will  be  entered  in  tlieir  respective  columns  ready  for  post- 
ing, as  illustrated  in  the  cash  journal  in  the  text,  which  gives  the  correct  footings  of  each 
special  column  for  the  month  of  March,  although  a  large  proportion  of  the  entries  are  left  for 
the  student  to  fill  in. 

If  a  firm  have  the  agency  for  the  sale  and  rental  of  various  properties,  they  will  need  a 
memorandum  book,  as  illustrated  in  the  text,  in  which  they  may  record  at  length  all  general 
instructions  and  limitations  pertaining  to  each  property.  Marginal  entries  can  also  be  made 
showing  the  general  terms  of  each  lease  relating  to  these  properties. 

A  memorandum  book  will  be  found  convenient  in  nearly  every  line  of  business  for 
recording  contracts  and  agreements,  and  other  facts  of  interest  that  may  not  go  on  record  as 
transactions. 

If  a  considerable  number  of  properties  are  to  be  lented,  it  would  be  well  to  keep  an 
auxiliary  ledger  for  the  tenants  or  lessees,  merely  to  show  the  amounts  due,  amounts  paid, 
expirations,  etc.  This  ledger  would  show  no  financial  results,  as  the  main  ledger  would  con- 
tain all  accounts  pertaining  to  our  business.  Below  the  memorandum  book  we  give  one 
account  illustrating  the  tenants'  ledger. 

In  keeping  an  account  on  our  general  ledger  with  a  property  owner  for  whom  we  are 
acting  as  agent,  it  would  be  well  to  itemize  the  debits  and  credits  in  such  a  way  that  we  could 
draw  a  statement  of  our  transactions  direct  from  the  ledger.  The  account  with  Charles 
Thomas  illustrates  such  a  method  of  itemizing. 

The  transactions  in  this  set  represent  the  business  of  the  corporation  described  in  Set 
Nine,  and  will  require  a  few  accounts  peculiar  to  corporations. 

The  title,  Capital  Stock,  represents  the  subscribed  capital  of  the  corporation,  and  when 
the  amount  subscribed  is  not  actually  invested,  an  account  with  Stockholders  should  be  used 
to  keep  the  books  in  balance.     Stockholders,  as   a   title,  is  debited  for  the  amount  of  unpaid 


REAL  ESTATE  BUSINESS.  175 


stock  that  is  subscribed,  and  this  account  represents  a  resource  if  it  shows  a  debit  balance,  as 
the  law  holds  each  stockholder  liable  for  the  amount  of  stock  he  may  have  subscribed  and 
not  yet  invested.  After  all  stock  is  paid  in,  the  account  with  Stockholders  will  be  in  balance 
and  can  be  closed. 

When  the  net  gain  is  found  and  a  part  of  it  is  to  be  paid  to  the  stockholders  as  dividends, 
and  the  remainder  kept  in  the  business  to  be  used  in  case  it  is  required,  Loss  and  Gain  will 
be  debited  for  the  whole  net  gain,  and  Dividend  and  Reserve  Profits  will  be  credited.  As 
the  dividends  are  paid  out  to  the  stockholders,  the  title  Dividend  will  be  debited,  and  any 
credit  excess  in  Dividend  account  will  be  a  liability,  showing  a  balance  still  due  some  stock- 
holder.     Reserve  Profits  will  also  be  a  liability  of  the  corporation  to  the  stockholders. 

The  student  will  record  notes  receivable  and  payable  in  the  bill  book  in  this  set,  but  will 
have  no  accounts  with  these  two  titles  in  the  ledger.  These  titles,  as  well  as  all  others  that 
do  not  require  posting  by  items,  should  be  checked  in  the  folio  column  when  they  are  entered 
in  the  cash  book. 

The  company  wish  to  know  how  much  they  expend  monthly  for  advertising,  and  how 
much  they  receive  for  notary  fees,  and  for  abstracting;  hence,  each  of  these  are  given  special 
titles  in  this  set. 

In  beginning  the  cash  book  for  April,  the  balance  on  hand  from  March  31  should  be  car- 
ried into  the  general  column  of  the  debtor  side,  and  each  of  the  special  columns  should  begin 
anew. 

TRANSACTIONS. 

MARCH. 

5 — The  Union  Real  Estate  Company  began  business  to-day  with  a  subscribed  capital  of 
$10,000 Two  of  the  stockholders  paid  in  cash  for  the  first  installment  on  their  stock,  $2,200. 

6 — Other  stockholders  paid  in  cash  for  the  first  installment  on  their  stock,  $1,800 Paid 

J.  L,  Smith  for  rent  of  ofifice  i  month,  $37.50. 

7 — Paid  for  office  furniture  and  stationery  $125 Accepted  the  agency  for  the  care  and 

renting  of  three  dwelling  houses  belonging  to  Charles  Thomas,  Cleveland,  Ohio,  for  which 
we  are  to  receive  a  commission  of  5  per  cent  on  all  rents  collected:  Dwelling  No.  92  Sixteenth 
Avenue,  at  $20  per  month;  No.  232  Nineteenth  Street,  at  $18  per  month;  No.  63  First  Avenue, 
at  $25  per  month ....  Paid  cash  for  printing  circulars  for  advertising  our  business  $8;  for  post- 
age for  mailing  circulars  $2.25,     [Debit  Advertising.] 

8 — Bought  of  A.  Learner  20  acres  of  land  one-half  mile  from  the  city,  allowing  him  $4,250 
for  it,  as  follows:  Cash  $2,250,  and  four  notes  of  $500  each,  payable  in  10,  20,  30  and  40  days, 

with  interest  at  6  per  cent Paid  cash  for  notarial  seal  and  commission  $12.50.     [Debit 

Notary  Fees.] 

9 — Accepted  the  agency  to  rent  or  sell  store  room  No.  29  Third  Street,  belonging  to 
James  Gordon,  the  rates  for  renting  being  left  to  our  discretion,  and  the  rates  for  selling  being 
left  to  correspondence.  We  are  to  receive  a  commission  of  5  per  cent  on  all  rents  collected, 
and  in  case  of  a  sale,  a  commission  of  3  per  cent  on  the  first  $2,000,  and  i^  per  cent  on  all 
amounts  above  $2,000  received  for  the  property,  either  in  cash  or  approved  notes. . .  .Paid  for 
Coal  for  heating  office  $5.50. ..  .Paid  for  advertising  in  Evening  Gazette  to  date  $7.50. 

10 — Paid  for  surveying  our  real  estate  into  acre  lots  $9. . .  .Rented  dwelling  No.  63  First 
Avenue  to  George  Cridler  for  six  months,  beginning  to-day,  at  $25  per  month,  receiving  rent 
in  advance  for  first  month. 

12 — Received  of  stockholders  cash  for  the  second  installment  on  their  stock,  $i,8co 

Paid  for  grading  and  planting  trees  on  our  real  estate  $232.50. . .  -Sold  Harvey  Pratt  2  lots  of 
one  acre  each  for  a  total  consideration  of  $1,000,  receiving  cash  $250,  and  his  3  notes  of  $250 
each,  due  in  15,  30  and  45  days,  with  interest  at  8  per  cent.,.. Paid  for  insuring  the  three 
dwellings  of  Mr.  Thomas  for  one  year:  No.  92  Sixteenth  Ave.,  $1,000  @  ^  per  cent;   No.  232 

Nineteenth  St.,  $900  @   \}i  per  cent;  No.  63  First  Avenue,  $1,200  @  y^  percent Balance 

of  cash  on  hand  $3,356. 


176 


HIGHER  ACCOUNTING. 


MARCH  I,  189- 


CASH. 


DR. 


OS 

Q 

.2 
'0 

to 

CREDITOR  TITLES 

EXPLANATIONS. 

Notary 
Fees 

Abstract's 

Real  Estate 

General 

=; 

Capital  Stock 

Amount  subscribed 

1 
I 

1 

lOOOO 

Stockholders 

On  First  Installment 

2200 

6 

/-■ 

Stockholders 
Bills  Payable 

Notes  to  A.  Learner 

[ 

1800 
2000 

10 

C.  Thomas 

Rent  63  First  ave. 

25 

12 

Stockholders 

On  Second  Installment 

1800 

K 

Real  Estate 

Sold  Harvey  Pratt  2  acre  Lots 
Cash  $230,  Notes  $750 

1000 

1000 

18825 

26 

James  Gordon 
Commission 

Part  reed,  on  sale  29  3d  st. 
Balance  being  forwarded 
Acct.  James  Gordon 

600 

200 

47 

50 

//' 

Real  Estate 

Sold  Aaron  Peters  i  acre  Lot 

Cash  S200,  Note  $400 

27 

Real  Estate 

Abstracting 
Notary  Fees 
Real  Estate 

Rent  of  Block  40,  6  months  to  A.  R.  Foster 
for  Wood  Yard 

Sold  R.  I.  Smith  3  Lots 

3 

15 

27 

50 

75 
375 

Cash  $125,  Note  S250. 

1 

28 

Real  Estate 
Notary  Fees 

Rental  of  5  lots  3  months  to  T.  J.  Mason 

18 

75 

1068 

75 

5 

25 

K 

Abstracting 

9 

6n 

Commission 

Acct.  C.  Thomas 

J 

^5 

2y 

^^ 

Commission 

Acct.  J.  Gordon 

50 

6 

75 

/^ 

Notary  Fees 
Abstracting 

25 

75 

10 
62 

QO 

8S 

/o 

26    25 

94 

2668 

7S 

45^89 

k7 

' 

■ 

' 

MEMORANDUM  BOOK. 
College  City,  March  7,  189-  - 


Rented  Mar  19,  189-  ,  to  Chas.  Carey,  3  months  at 
$20  per  mo.,  advance. 

Accepted  the  agency  for  the  care  and  renting  of  three  dwelling 
houses  belonging  to  Charles  Thomas,  Cleveland,  Ohio,  for  which  we 
are  to  receive  a  commission  of  5  per  cont  on  all  rents  collected. 

Dwelling  No.  92  i6th  ave.,  at  $20  per  mo. 

Rented   Mar.  14,189--,  to  Harvey  Jones,   i  yr.  at 
$18  per  mo,  advance,  beg.  Mar.  15. 

"    232  19th  St.,  at  §18        " 

Rented  Mar.  10,  189-,  to  Geo.  Cridler,  6  mos.  at 
$25  per  mo.,  advance. 

"            "    63  1st  ave.,  at  $25          " 

Rented  Mar.  13,  189-,  for  3  mos.  to  Ashley  &  Par- 
ton,  rent  paid  in  advance.    Three  mos.  $133. 

9 
Accepted  the  agency  for  the  sale  or  rent  of  store  room  No.  29 
Thirdst-.belongingto  James  Gordon,  Clinton,  Iowa,  the  rates  for  rent- 
mg  being  left  to  our  discretion,  and  the  rates  for  selling  being  left  to 
correspondence.     Our  commission  is  5  per  cent  of  all  rents  collected; 
and  in  case  of  a  sale,  3  per  cent  on  the  first  S2000,  and  i^  per  cent 
on  all  amounts  above  $2000  received  for  the  property,  either  in  cash 
or  approved  notes. 

Mar.  26,  189-,  sold  to  Ingham  &  Johnson  for  cash 
atid  notes  $4000. 

Mar.  26, 189-,   returned  prepaid  rent  $120  to   Ing- 
ham &  Johnson. 

i  $25  monthly  in  advance. 
I  Lease  expires  Sept.  10,  18 


LEDGER  ACCOUNT  WITH  A    TENANT. 
GEORGE  CRIDLER. 


No.  63  First  ave. 

Property  of   Charles  Thomas 


189 — 

189- 

Mar. 

10 

Rent  I  mo.  to  Apr.  10 

25 

Mar. 

10 

Cash 

25 

Apr. 

10 

"     I     "     "  May  10 

25 

Apr. 

10 

25 

REAL  ESTATE  BUSINESS. 


If  7 


MARCH  i8g- 


CASH. 


CR. 


Q 

.2 

"o 

DEBTOR  TITLES. 

EXPLANATIONS. 

Expense 

Avertising 

Real  Estate 

General 

5 
7 

8 

9 

Stockholders 

Expense 

Expense 

Advertising 

Advertising 

Real  Estate 

Notary  Fees 

Expense 

Advertising 

Real  Estate 
Real  Estate 
Bills  Rec. 
C.  Thomas 

Expense 
C.  Thomas 
C.  Thomas 
J.  Gordon 
J.  Gordon 
Real  Estate 
Advertising 

Expense 
Bills  Pay. 
Interest 

Stock  Subscribed 

Office  Rent  i  month 

Furniture  and  Stationery 

Printing  Circulars 

Postage  on  above 

Bot.  of  A.  Learner  20  acres  Land 

Cash  52250,  Notes  $2000 

Commission  and  Seal 

Coal  for  office 

Evening  Gazette  to  date 

Surveying  into  acre  lots 

Grading  and  Planting 

Notes  H.  Pratt 

Ins.  92  Sixteenth  ave.,                                  $7.50 
"    232  Nineteenth  St.,                                  11.25 
"     63  First  ave.,                                             10.50 

Postage  and  Stationery 

Commission  en  Rents 

Proceeds  of  Rent 

Commission  on  Rent 

In  full  of  acct. 

Recording  and  Platting 

Union  Park  Ad. 

Janitor  work 

Bal.  NoteNo.  2 

On  above  note 

Balance  on  hand 

37 
125 

5 

50 
50 

8 
2 

7 

25 
50 

4250 

9 
232 

50 

lOOOO 

12 
168 

17 

4491 

750 

29 

15469 

3 
16 
6 

73 
26 

56 

9 
'  100 

I 
ig88 

50 

0 

7 

25 
50 

75 
50 

ID 
12 

56 

7i 

28 
29 

30 
31 

26 

11 

25 

15 
10 

75 
50 

75 
75 
75 

i 

83 

52 

21 1 

il 

27531  75  1 

45189 

27 

\ 

i 

S  TO  CKHOLDERS. 


189- 
Mar. 


Capital  Stock 


3 

10000 

1 

189- 
Mar. 

: 

I 

12 
13 

15 

10000 

\ 

First  Installment 
Second  Installment 


2 

2200 

2  , 

1800 

2 

1800 

2 

2700 

2 

1500 

lOOOO 

CHARLES  THOMAS,  CLEVELAND,  OHIO. 


189- 

Mar. 

12 

17 

19 

29 

Apr. 

16 

23 

Ins.  92  16th  ave. 

"      232  19th  St. 

"     63  1st  ave. 
Walk.  232  igth  st. 
Rep.  Roof,  92  i6th  ave. 
Com.  on  Rents,  5  per  cent 
Cash  in  full 


Phinting,  63  ist  ave. 
Com.  on  Rents,  5  per  cent 


Cash  in  full 


3 

7 

1 
50 

3 

II 

25 

3 

10 

50 

3 

6 

75 

3 

7 

75 

5 

3 

15 

16 

10 

63 

7 

32 

50 

7 

3 

15 

7 

27 

35 

63 

' 

\\ 

189- 

Mar. 


Apr. 


Rent,  63  First  ave. 
232  19th  St. 
"    .  92    16th  ave 


Rent,  63  First  ave. 
"       232  19th  St. 
"      92  1 6th  ave. 


2 

25 

2 

18 

2 

20 

'                1 

' 

63 

2  , 

18 
20 


178  HIGHER  ACCOUNTING. 


13 — Received  from  stockholders  for  the  second  installment  on  their  stock,  ^2,700 Re- 
ceived cash  for  notary  fees  ^3.75 Rented  room  No.  29  Third  Street,  to  Ashley  &  Parton 

for  3  months,  at  $45  per  month,  collecting  the  rent  for  three  months  in  advance Paid  for 

insuring  store  room  of  James  Gordon  for  ^3,000,   i  year  at  \yk  per  cent  premium Paid 

Daily  News  for  advertising  property  for  sale,  $\'j.if). 

14 — Received  from  the  remainder  of  the  stockholders  for  the  second  installment  on  their 

stock,  $1,500 Paid  cash  for  blanks  for  office  use,  ^3.50 Paid  for  repairs  on  store  room 

of  James  Gordon,  rented  13th  inst.,  $25.75 Rented  dwelling  No.  232  Nineteenth  Street,  to 

Harvey  Jones  for  one  year,  at  $18  per  month,  payable  monthly  in  advance,  the  rent  beginning 
Mar.  15.     Received  cash  for  first  month. 

15 — Bought  of  C.  A,  Wilson  a  set  of  abstract  books  of  this  county,  complete  to  date,  for 
$2,500,  paying  cash  $1,250,  and  giving  our  two  notes  for  $625  each,  due  in  30  and  60  days 
respectively,  each  bearing  interest  at  6  per  cent.     [Debit  Abstracting.] 

17 — Paid  for  grading  and  street  work  on  our  lots  $98.50 Paid  for  repairs  on  sidewalk 

in  front  of  No.  232  Nineteenth  Street,  $6.75 Received  for  notarial  services  $5.25,  for  ab- 
stracts of  title  $7.50 Paid  taxes  for  James  Gordon,  on  store  room  No.  29  Third  Street, 

^2775- 

19 — Paid  for  printing  and"  distributing  circulars  for  adv^ertising  $22.50 Rented  dwell- 
ing No.  92  Sixteenth  Ave.,  to  Charles  Carey  for  3  months,  beginning  to-day,  at  $20  per  mo., 

collecting  for  one  month Paid  for  stationery  for  office  use  $2.50 Received  for  notary 

fees  $3.75,  for  abstracting  $6.25 Paid  for  repairs  on  roof  of  dwelling  No.  92  Sixteenth  Ave., 

$7.75 Paid  for  clerk  hire  $27.50. 

21 — Sold  M.  E.  Price  i  acre  of  ground  for  $600,  receiving  cash  $200,  and  his  notes,  one 
at  30  days  for  $200,  one  at  60  days  for  $200,  the  notes  bearing  interest  at  8  per  cent Re- 
ceived for  abstracting  $17.50,  notary  fees  $2.50 Paid  our  note  payable  No.  i  with  interest 

on  same. 

24 — Bought  of  C.  E.  Jones  45  acres  of  land  next  to  the  city  limits,  for  a  consideration  of 
$22,500,  indorsing  to  him  in  part  payment  all  notes  receivable  on  hand  at  their  face  value, 
including  interest  to  date  on  each,  giving  him  our  notes,  seven  in  number,  each  for  $2,500,  the 
first  due  on  demand,  and  the  others  due  in  one,  two,  three,  four,  five,  and  six  months  respec- 
tively, each  bearing  interest  at  5  per  cent,  and  paying  him  cash  for  the  balance. 

26 — By  direction  of  James  Gordon  we  have  this  day  sold  his  store  room,  No.  29  Third 
Street,  to  Ingham  &  Johnson,  receiving  cash  $1,500,  and  their  note,  secured  by  mortgage  on 
the  store  room,  for  $2,500  due  in  one  year,  and  have  sent  Gordon  the  note  and  also  $1,300  of 
the  cash,  crediting  him  with  the  cash  we  have  kept  back,  $200,  and  debiting  him  with  com- 
mission on  the  sale,  as  per  contract. .  ..Sold  an  acre  lot  to  Aaron  Peters  for  $600,  receiving 
cash  $200,  and  his  note  due  in  six  months,  with  interest  at  7  per  cent,  for  the  balance. . . .  Paid 
Ingham  &  Johnson  $120,  the  amount  of  rent  prepaid  on  store  room  bought  by  them  and 
leased  to  Ashley  &  Parton. 

27 — Paid  for  surveying  and  laying  out  in  town  lots  the  land  we  bought  of  C.  E.  Jones, 
and  for  platting  the  same  for  record,  $415 ...  .Leased  a  block  of  lots  to  A.  R.  Foster  for  a 
wood  yard,  receiving  cash  for  six  months'  rent  in  advance  $75 ....  Received  cash  for  abstract- 
ing $27.50,  and  for  notary  fees  $3.25.  Sold  3  lots  to  R.  I.  Smith  for  $375,  receiving  cash  $125, 
a  note  at  60  days  for  $125,  and  a  note  at  120  days  for  $125,  both  notes  bearing  interest  at  8 
per  cent. 

28 — Leased  five  vacant  lots  to  T.  J.  Mason  for  two  years,  at  $75  per  year,  payable  quar- 
terly in  advance,  receiving  cash  for  first  quarter  $18.75 ....  Received  cash  for  notarial  services 
$5.25,  for  abstracting  $9.60. . .  .Paid  for  postage  and  stationery  for  office  use  $2.25. . .  .Paid  for 
advertising  $29.75. 

29 — Sent  statement  to  Charles  Thomas,  remitting  proceeds  of  his  rents  collected  after 
deducting  expenses  and  commissions  on  collections. . .  .Sent  statement  to  James  Gordon  and 
remitted  cash  for  balance  due  him,  after  deducting  commission  on  rent  collected  ....  Received 
cash  for  notary  fees  $2.50,  and  for  abstracting  $25.75. 

30 — Paid  cash  for  recording  fifteen  blocks  of  lots  recently  platted  $26.75 ^^\^  for 

posters  and  circulars  advertising  lots  in  new  addition  $56.75.. .  .Paid  for  janitor  work  in  office 
$7-50. 


REAL  ES  TA  TE  B  UStNESS.  1 79 

31  —  Gave  A.  Learner  our  note  at  30  days  for  ;!S400,  bearing  interest  at  6  per  cent.,  and 
cash  for  balance  of  principal  and  interest  of  note  payable  No.  2,  due  today. 

Our  cash  on  hand  this  evening  amounts  to  ;$  1,988. 52.  [The  student  may  add  the  special 
columns  and  post  their  totals  to  the  ledger,  and  take  a  proof  sheet  of  the  accounts  from  the 
ledger,  Bills  Receivable  and  Payable  from  the  note  book,  and  Cash  balance  from  the  cash 
book.] 

APRIL. 

2 — Paid  Martin  Johnson  for  street  work  in  Union  Park  Addition,  cash  ^500,  and  4  notes, 
one  at  30  days  for  $750,  one  at  45  days  for  ^500,  one  at  60  days  for  ;$i,ooo,  one  at  90  days  for 
;^l,250,  each  note  bearing  interest  at  5  per  cent.  .  .  .Received  cash  for  abstracting  $\'j.^o,  for 
notary  fees  ;^3.75 .  . . .  Paid  cash  for  posters  advertising  Union  Park  Addition  $250.  ..  .Paid 
balance  of  bookkeeper's  salary  to  April  i,  $$y.2$. 

6 — Received  cash  for  abstracting  ^27.25,  notary  fees  1^3.25  .  .  .Sold  4  acre  lots  today  as 
follows  :  I  lot  to  George  Day  for  ;^450,  receiving  cash  ^150,  and  3  notes,  one  at  30  days  for 
$75,  one  at  60  days  for  ;^iOO,  one  at  90  days  for  $12^,  each  note  bearing  interest  at  8  per  cent; 
I  lot  to  Henry  Cushman  for  $425,  receiving  cash  ;^225,  and  two  notes  for  ;^ioo  each,  due  in 
two  and  four  months  respectively,  each  bearing  interest  at  7  per  cent;  i  lot  to  John  Cum- 
mings  for  ;^400  cash;  i  lot  to  Bartley  Brown  for  ^500,  receiving  cash  ^^200,  and  two  notes  in 
equal  amounts  for  the  balance,  due  in  one  and  two  months  respectively,  each  note  bearing 
interest  at  6  per  cent. 

10 — Collected  cash  of  George  Cridler  for  one  month's  rent  of  No.  63  First  Ave.,  as  per 
contract.  ..  .Paid  City  Directory  Co.  cash  for  advertising  ;^i  7.50. ..  .Paid  cash  for  office  sta- 
tionery ;$I7.25.  .  .  .  Paid  cash  for  blank  book  for  abstracting  ;^  12.75. .  .  .Paid  cash  for  principal 
and  interest  of  note  payable  No.  3,  due  today.  .  .  .Received  cash  for  abstracting  $22.75. 

14 — Received  cash  of  Harvey  Jones  for  one  month's  rent  of  No.  232  Nineteenth  Street, 
as  per  contract.  .  .  .Received  cash  for  abstracting  ;^  12.75.  -  •  -Paid  cash  for  postage  and  station- 
ery for  office  $S.7S  ■  ■  -  -Sold  2  lots  in  Union  Park  Addition  to  Leslie  Gordon  for  cash,  $250. 

16 — Sold  out  our  entire  abstracting  business  to  Bradley  &  Sumner  for  ;^2,725,  receiving 
cash  $1,225,  their  note  at  i  month  for  $400,  note  at  2  months  for  $500,  note  at  3  months  lor 
$600,  each  of  the  notes  bearing  interest  at  7  per  cent.  . .  .  Received  for  notary  fees  $2.25  .... 
Paid  Daily  Republican  for  advertising  $29.75.  .  .  .Paid  cash  for  painting  No.  63  First  Ave., 
belonging  to  Charles  Thomas,  $32.50. 

19 — Collected  cash  of  Charles  Carey  for  i  month's  rent  of  No.  92  Sixteenth  Ave.,  as  per 
contract. . .  .Sold  10  blocks  of  lots  in  Union  Park  Addition  to  a  syndicate  of  real  estate  deal- 
ers,' represented  by  John  G.  Horton,  for  a  consideration  of  $25,000,  and  they  have  given  new 
no'es  to  C.  E.  Jones,  and  have  taken  up  and  canceled  the  seven  notes  we  gave  him  Mar.  24, 
and  the  interest  accrued,  and  have  given  us  cash  for  the  balance.  .  .  .Paid  cash  for  office  help 
$17.25. 

20 — Paid  our  note  payable  No.  4,  due  today,  with  interest.  .  ,  .Paid  our  note  payable  No. 
5,  favor  C.  A.  Wilson,  due  17th  inst.,  with  interest  to  date. 

23 — Received  cash  for  notary  fees  $5.25 ...  .Paid  cash  for  advertising  in  Daily  Call 
$17.50. . .  .Rendered  a  statement  to  Charles  Thomas,  and  sent  him  cash  for  proceeds  of  rents 
collected  after  charging  up  our  commission  as  per  contract. 

25 — Paid  cash  for  grading  in  Union  Park  Addition  $175.50. 

30 — Paid  the  secretary  cash  $300,  for  2  month's  salary.  .  .  .Paid  cash  for  office  rent  for 
April  $37.50. 

Our  unsold  real  estate  is  inventoried  at  $9,500.  Our  office  furniture  and  stationery  is 
worth  $110.  The  student  may  estimate  the  interest  receivable  and  payable  from  the  note 
book,  and  render  a  statement,  after  which  he  may  close  the  property  and  representative 
accounts  into  Loss  and  Gain.  The  stockholders  declare  a  divided  of  $3,000,  and  vote  to 
carry  the  remainder  of  the  gain  to  Reserve  Profits. .  .  .Each  of  the  stockholders  as  shown  at 
close  of  Set  9.  except  A.  Learner  who  has  15  shares,  has  drawn  his  dividend  in  cash,  which 
being  entered,  the  cash  book  should  be  balanced. 

The  student  may  close  the  remainder  of  the  ledger,  and  as  this  ledger  is  not  to  be  used 
longer,  he  may  carry  all  resources  and  liabilities  (including  inventories)  to  Balance  account. 
Cash  balance  and  the  amount  of  unpaid  notes  receivable  and  payable  should  also  be  carried  to 
Balance  account,  which  should  then  be  in  balance. 


1 80  HIGHER  A  ceo  UNTING. 


PRACTICAL  BANKING. 


The  steps  necessary  to  the  organization  of  a  national  or  private  bank  are  so  dependent  on 
legislation  from  time  to  time,  that  they  who  are  about  to  organize  such  an  enterprise  should  con- 
sult the  best  authority  at  the  time  and  in  the  locality  in  which  they  propose  to  do  business. 
It  would  not  be  wise,  therefore,  for  us  to  bewilder  the  student  in  bank  bookkeeping  with  a  dis- 
cussion of  the  origin  and  organization  of  banking  institutions. 

The  transactions  of  a  bank  require  so  many  records,  that  it  has  been  the  study  of  all  book- 
keepers to  make  the  system  as  brief  as  possible,  without  sacrificing  the  completeness  of  the 
record.  The  banker  needs  to  keep  such  record9»as  will  show  him  the  condition  of  his  affairs  at 
a  glance;  and  as  his  records  have  largely  to  do  with  all  business  men  around  him,  it  is  essential 
that  he  use  every  known  method  of  proving  his  accounts  absolutely  correct. 

The  business  of  a  bank  usually  consists  of  four  departments  ;  that  of  receiving  deposits  and 
paying  depositors'  checks,  called  Deposits;  that  of  buying  and  selling  drafts  on  other  banks, 
called  Exchange;  that  of  lending  money  to  business  men  on  notes  propeily  secured  and  running 
for  short  periods  of  time,  called  Discounts;  and  that  of  collecting  notes  and  drafts  for  business 
men,  called  Collections.  The  methods  of  recording  the  last  three  divisions  do  not  materially 
differ  in  the  various  systems ;  hence,  we  have  chosen  forms  for  these  books  that  seem  to  us  well 
adapted  to  any  ordinary  banking  business. 

There  are  two  leading  systems  of  bank  bookkeeping,  differing  mainly  in  the  style  of 
\edger  used.  In  the  older  of  these  systems,  the  records  of  all  transactions  are  carried  to  journals 
or  cash  book,  and  from  these  to  the  ledger,  as  in  other  lines  of  business,  except  that  the  ledger 
is  made  to  show  the  balance  of  each  account  daily.  In  the  later  system,  which  is  being  received 
by  bankers  with  great  favor,  the  transactions  pertaining  to  depositors'  accounts  are  recorded 
directly  in  the  ledger  from  the  original  tickets,  without  the  use  of  either  journal  or  cash   book. 

The  object  sought  by  all  bankers  is  to  make  their  books  show  the  present  condition  of  each 
depositor's  account,  the  relation  of  the  bank  to  all  persons  and  institutions  with  which  it  has 
dealings,  and  also  by  keeping  accounts  with  the  various  departments  of  bank  industry,  to  defer 
mine  the  profits  and  losses,  and  the  sources  of  each. 

THE  DAILY  ROUTINE  IN  BANKING. 

Routine  work  in  banking  naturally  divides  itself  into  three  departments.  , 

First — That  of  the  Teller,  whose  office  it  is  to  receive  and  pay  out  all  cash,  and  to  file 
tickets,  properly  describing  each  transaction. 

Second — That  of  the  Bookkeeper,  who  records  in  the  cash  book  and  ledgers  the  various 
tickets  filed  by  the  teller,  making  a  daily  trial  balance  of  the  ledger,  and  showing  the  condition 
of  the  bank  at  the  close  of  each  day. 

Thiid — That  of  the  Cashier,  who  attends  to  the  general  business  of  the  bank,  including 
the  loans  and  discounts,  the  correspondence  and  collections,  and  the  signing  of  drafts,  and  who 
has  a  general  supervision  of  the  other  officers  and  clerks  in  the  bank. 

In  a  large  bank  the  work  in  each  department  may  be  subdivided  among  a  number  ot 
clerks,  while  in  a  small  bank  one  man  may  attend  to  all  of  these  departments. 

A  large  proportion  of  the  transactions  carried  out  by  the  teller  and  cashier  are  such,  that 
some  paper  is  left  in  the  possession  of  the  bank  from  each,  from  which  the  bookkeeper  can  get 
the  history  of  the  several  transactions.     If  no  paper  is  left  in  connection  with  a  transaction,  the 


PRACTICAL  BANKING.  i8i 

officer  is  required  to  fill  out  a  ticket  giving  the  result  of  the  transaction.  If  a  deposit  is  received, 
the  depositor  presents  a  deposit  ticket  which  the  teller  places  on  file ;  if  a  depositor's  check  is 
cashed,  the  check  is  placed  on  file  for  the  bookkeeper.  If  the  teller  or  cashier  receives  a  check 
or  draft  drawn  on  some  other  bank,  he  places  it  in  the  remittance  drawer  until  the  close  ot 
banking  hours.  If  he  sells  a  bank  draft,  he  enters  a  description  of  the  draft  at  once  in  the  Draft 
Register. 

If  he  discounts  a  paper,  he  pencils  the  amount  of  the  discount  and  proceeds  paid,  on  the 
paper  and  places  it  in  the  discount  drawer,  or  he  writes. this  memorandum  on  a  discount  ticket 
and  pins  it  to  the  discounted  paper,  until  it  is  recorded  in  the  Discount  Register.  If  he  collects 
cash  for  a  discounted  paper,  the  same  is  marked  paid,  at  once,  in  the  Discount  Register,  and  a 
ticket  is  written  out  and  placed  on  file,  descriptive  of  the  transaction. 

If  a  paper  is  left  at  the  bank  for  collection,  the  same  is  placed  in  the  collection  drawer,  ready 
for  entry,  later  in  the  day,  in  the  Collection  Register.  If  a  paper  previously  left  for  collection, 
is  paid,  it  is  marked  paid,  at  once,  in  the  Collection  Register,  and  tickets  are  written  and  filed 
showing  the  results. 

If  a  certificate  of  deposit  is  issued  for  money  received  or  for  the  proceeds  of  a  collection,  it 
is  entered  at  once,  in  the  Certificate  of  Deposit  Register,  and  no  ticket  is  filed.  If  a  certificate 
of  deposit  is  paid,  the  canceled  certificate  is  placed  on  file. 

If  the  teller  is  required  to  certify  a  check,  he  should  find  out  whether  the  person  drawing 
the  check  has  a  balance  to  his  credit,  and  if  he  has,  the  teller  writes  "Certified,"  giving  the  date 
and  signing  his  name  as  teller  of  the  bank,  across  the  face  of  the  check.  Each  certified  check 
is  entered  in  the  Certified  Check  Register,  from  which  the  debits  and  credits  are  carried  at  the 
close  of  the  day.  If  a  certified  check  is  paid,  the  canceled  check  is  placed  on  file,  and  at  the 
close  of  the  day  is  debited  to  Certified  Checks. 

If  any  other  kind  of  transaction  is  carried  out,  a  ticket  is  filed  containing  such  a  description 
as  will  enable  the  bookkeeper  to  make  a  proper  record  of  the  same  at  the  close  of  banking 
hours. 

For  convenience  in  describing  the  bank  books,  we  will  classify  them  into  two  groups,  which 
we  will  name  the  Auxiliary  Books  and  the  Essential  Books. 

THE   AUXILIARY   BOOKS. 

The  Draft  Register  contains  a  description  of  all  drafts  sold  by  the  bank.  These  drafts  are 
usually  drawn  on  a  bank  located  in  some  commercial  center.  Banks  frequently  arrange  with  two 
or  more  such  correspondents :  one  perhaps  at  New  York  or  Philadelphia,  a  second  at  Chicago, 
a  third  at  St.  Louis,  or  some  other  western  point.  For  convenience  there  should  be  a  separate 
register  for  each  bank  on  which  we  draw  drafts.  The  total  of  drafts  sold  each  day  is  credited 
to  the  bank  on  which  we  have  drawn  the  drafts,  their  account  being  kept  in  the  General  Ledger. 
The  total  received  for  exchange  each  day  is  also  carried  to  the  same  ledger  to  the  credit  of  Ex- 
change. 

Should  there  be  several  regular  correspondents  of  the  bank,  they  could  have  as  many  sep- 
arate registers ;  or  a  separate  part  of  the  one  register  could  be  assigned  to  each  correspondent. 

The  Remittance  Register  contains  a  description  of  all  drafts,  checks,  and  other  commercial 
paper  that  have  been  forwarded  to  the  bank's  correspondent,  usually  the  one  on  whom  drafts 
are  drawn. 

The  Draft  Register  gives  an  itemized  record  of  the  credits  of  the  bank's  correspondent,  and 
the  Remittance  Register  gives  an  itemized  record  of  the  debits  of  the  same  party,  and  the  ledger 
account  with  the  bank  shows  the  result. 

The  Discount  Register  contains  a  description  of  all  notes  and  time  drafts  bought  by  the 
bank  or  received  for  money  loaned.  If  an  interest  bearing  note  is  discounted,  it  is  customary  to 
compute  the  interest  to  maturity  and  add  it  to  the  face  of  the  note.  The  total  of  principal  and 
interest  is  the  amount  on  which  the  bank  discount  is  computed.  If  the  note  does  not  bear  in- 
terest, the  face  of  the  note  is  carried  to  the  amount  column,  and  the  total  of  these  amounts  for 
the  .-day  is  carried  to  the  debit  of  Bills  Discounted  in  the  General  Ledger.  The  discount,  the 
amount  deducted  from  each,  is  entered  in  a  special  column  in  the  register,  and  the  total  carrie'^ 
to  the  credit  of  Discount  in  the  General  Ledger.  When  the  discounts  are  paid,  they  are  entr 
paid  in  the  remark  column  of  the  register,  and  there  being  no  paper  left  to  file  in  the  bank 


1 82  HIGHER  ACCOUNTING 

record   of  the  transaction,  a  ticket  is  placed   on   file  with  a  memorandum,  "Credit  Bills  Dis. 

$ ,"  and  under  this  the  explanation,  "  Discount  No. paid."     The  amount  of  these  tickets 

is  carried  to  the  credit  of  Bills  Discounted  in  the  General  Ledger. 

The  Collection  Registet  contains  a  description  of  all  paper,  notes,  or  bills,  left  at  the  bank 
by  other  parties  for  collection;  as  these  papers  do  not  affect  the  business  of  the  bank  until  their 
payment,  no  record  of  them  is  carried  from  the  register  to  either  ledger.  When  the  collections, 
that  is,  the  papers  above  referred  to,  are  paid,  they  are  entered  paid  in  the  remark  column  of  the 
register,  and  a  ticket  is  filed  for  each,  stating  whom  to  credit  with  the  proceeds  of  the  collec- 
tion, that  is,  the  amount  that  is  left  after  the  collection  charges  are  deducted.  When  collection 
No.  3,  left  by  H.  C.  Cusey,  is  paid,  the  banker  will  write  a  ticket  as  follows:  "Credit  H.  C. 
Cusey  ;^598.50,  proceeds  of  Collection  No.  3."  He  will  also  write  a  second  ticket,  "Credit  Col- 
lection ^1.50,  charges  on  Col.  No.  3." 

If  the  party,  for  whom  the  paper  was  collected,  is  a  regular  depositor,  the  proceeds  of  the 
collection  will  be  entered  as  a  deposit  from  the  ticket  filed.  If  he  is  not  a  depositor,  his  pro- 
ceeds are  entered  as  a  certificate  of  deposit,  and  he  can  draw  the  money  at  any  time  by  endors- 
ing the  certificate.  Some  bankers  credit  transient  customers  with  such  proceeds,  and  require 
them  to  check  out  the  amount,  thus  balancing  the  accounts.  Such  accounts  are  usually  kept 
in  a  separate  ledger,  called  Petty  Deposits. 

If  the  paper  has  been  collected  for  some  out-of-town  party,  a  draft  is  sent  at  once  for  the 
proceeds  of  the  collection  and  the  charge  for  collection  is  entered  as  exchange  on  the  draft. 
No  ticket  should  be  filed  in  such  a  transaction,  as  the  results  will  appear  in  the  totals  taken  from 
the  Draft  Register. 

As  soon  as  a  collection  or  discount  has  been  entered  paid  in  the  remark  column  of  either 
register,  and  a  ticket  for  the  same  has  been  filed,  a  check  mark  should  be  made  in  the  register 
to  indicate  that  the  record  is  completed. 

The  Certificate  of  Deposit  Registet  contains  a  description  of  all  certificates  issued  by  the 
bank,  and  when  these  are  paid,  the  date  of  payment  is  entered  in  the  proper  columns.  The  total 
of  these  certificates  issued  each  day,  is  carried  to  the  credit  of  Certificates  of  Deposit,  this  ac- 
count being  kept  in  the  Deposit  Ledger.  The  paid  certificates  are  entered  in  the  Deposit  Ledger 
to  the  debit  of  Certificates  of  Deposit, 

The  Certified  Clicck  Register  contains  a  list  of  the  checks  that  are  certified  for  depositors. 
These  checks  are  debited  to  the  depositors'  accounts,  the  same  as  paid  checks,  and  the  total 
amount  of  certified  checks  is  credited  to  Certified  Checks  in  the  General  Ledger.  When  certi- 
fied checks  are  paid  by  the  bank,  they  are  debited  to  Certified  Checks. 

The  Signature  Book  contains  the  signature,  business  address,  and  kind  of  business  of  each 
depositor.     These  are  arranged  in  alphabetical  order,  for  convenience  in  referring  to  signatures. 

The  Discount  Ticklet  and  the  Collection  Tickler  are  books  that  may  or  may  not  be  used. 
Their  office  is  to  group  together,  under  each  date,  all  discounts  and  collections  that  fall  due  on 
that  date,  in  order  that  the  cashier  may  know  whether  all  papers  are  paid  at  maturity,  and,  if 
not  paid,  that  he  may  take  the  necessary  steps  of  notice  and  protest  for  non-payment.  Ticklers 
do  not  give  a  complete  history  of  each  paper,  merely  giving  the  register  number,  the  payer  of  the 
paper  and  his  residence,  the  endorser  or  owner,  and  the  amount  of  the  paper. 

In  modern  banking  the  use  of  the  tickler  is  largely  supplied  by  the  use  of  a  large  wallet  or 
drawer,  with  separate  apartments  for  each  day  of  the  month.  The  discounts  and  collections 
are  placed  in  these  apartments  according  to  their  maturity  dates,  so  that  they  may  be  readily 
found  when  wanted.  If  the  papers  are  thus  classified  by  maturity  dates,  the  ticklers  will  scarcely 
be  needed,  and  the  papers  left  unpaid  will  be  readily  found,  when  wanted. 

By  inquiring  of  progressive  bankers,  we  find  that  a  large  proportion  of  them  do  not  use  the 
ticklers,  and  in  harmony  with  this  custom,  we  have  omitted  these  auxiliary  books  from  our 
banking  course,  as  their  use  or  omission  does  not  in  the  least  affect  any  of  the  results. 

THE   ESSENTIAL   BOOKS. 

The  essential  books  in  banking  are  the  Cash  Book,  Depositors'  Ledger,  and  General 
Ledger.  Some  bankers  discard  the  cash  book,  and  post  all  debits  and  credits  direct  to  the 
ledgers  from  the  tickets.  We  would  advise  the  use  of  the  cash  book  for  recording  all  debits 
and  credits  that  belong  to  accounts  in  the  general   ledger.     In  writing  up  the  bank  books  each 


or  TMt 

PRACTICAL  BANKING.         (   UNIVERSITY   1         183 

Of        . 

day,  the  depositors'  ledger  sliould  be  written  first,  the  cash  book  second,  and  the  general  ledger 
last,  and  we  will  describe  the  books  in  this  order. 

TJie  Depositors'  Balance  Ledger  is  ruled  so  that  each  depositor's  account  occupies  but  a 
single  line  extending  horizontally  across  the  page.  Each  day's  space  is  divided  into  four  col- 
umns, one  for  checks  and  debit  items  in  detail,  a  second  for  the  total  of  these  debits,  a  third  for 
the  depositor's  credit,  and  a  fourth  for  his  balance  at  the  close  of  the  dav.  In  large  banks, 
where  the  depositors  are  likely  to  draw  a  large  number  of  checks  daily,  they  provide  two  col- 
umns daily  for  checks  in  detail,  and  sometimes  two  columns  for  deposits  and  credits,  thus  mak- 
ing five  or  six  columns  in  each  day's  space.  Tlic  space  between  the  horizontal  lines  is  made 
wide,  so  that  there  may  be  room  to  list  a  considerable  number  of  checks  for  each  depositor,  if 
small  figures  are  used. 

Large  books  are  used,  so  that  an  open  folio  of  two  pages  will  contain  the  records  for  one 
week,  the  accounts  being  forwarded  to  a  new  folio  on  each  succeeding  Monday. 

Bankers  who  use  this  style  of  ledger,  usually  have  the  names  of  their  permanent  depositors 
printed  in  alphabetical  order  in  the  book  when  it  is  ruled,  leaving  enough  of  blank  space  for 
others  that  may  be  added  during  the  year.  In  this  way,  the  labor  of  copying  the  names  once  a 
week  either  for  ledger  or  trial  balance  is  avoided,  the  only  labor  of  forwarding  the  accounts 
bei.ig  ihe  transfer  of  balances  from  one  folio  to  another. 

The  deposit  tickets  and  the  paid  checks,  except  paid  certified  checks,  are  taken  from  the 
teller's  file  and  entered  direct  in  the  depositors'  ledger,  and  the  checks  certified  by  the  teller  dur- 
ing the  day,  and  recorded  in  the  certified  check  register,  are  also  entered  in  the  depositors' 
ledger  to  the  debit  of  the  firms  who  drew  the  checks.  If  a  depositor  has  a  balance  to  his  credit 
at  the  close  of  the  day,  his  balance  is  written  in  black  ink ;  but  if  he  has  been  allowed  to  over- 
draw his  account  and  he  has  a  balance  due  the  bank,  the  debit  balance  is  written  in  red  ink. 

The  Cash  Book  contains  all  titles  and  amounts  that  belong  to  the  general  ledger.  The 
total  of  the  checks  entered  in  the  depositors'  ledger  is  entered  in  the  cash  book  as  cash  paid, 
debiting  Deposits,  and  the  total  of  the  deposits  entered  in  the  depositors'  ledger  is  entered  in  the 
cash  book  as  cash  received,  crediting  Deposits.  The  total  of  drafts  recorded  in  the  draft  regis- 
ter is  entered  in  the  cash  book  as  cash  received,  crediting  the  bank  on  whom  the  drafts  were 
drawn,  and  the  total  of  exchange  in  the  draft  register  is  entered  in  the  cash  book  as  cash  re- 
ceived, crediting  Exchange.  The  total  of  remittances  recorded  in  the  remittance  register  is 
entered  in  the  cash  book  as  cash  paid,  debiting  the  bank  to  whom  the  remittances  were  sent. 
The  total  amount  of  notes  and  bills  entered  in  the  discount  register  is  entered  in  the  cash  book 
as  cash  paid,  debiting  Bills  Discounted,  and  the  total  discount  in  the  discount  register  is  entered 
in  the  cash  book  as  cash  received,  crediting  Discount.  The  total  of  certified  checks  recorded 
in  the  Certified  Check  Register  is  entered  in  the  cash  book  as  cash  received,  crediting  Certified 
Checks.  All  other  debits  and  credits  are  entered  from  paid  certified  checks  and  from  debit  and 
credit  tickets  left  on  file  by  the  teller. 

If  all  tickets  debiting  or  crediting  the  same  title  are  combined  in  the  cash  book,  before  they 
are  extended  to  the  amount  columns,  the  work  of  posting  to  the  general  ledger  will  be  greatly 
reduced,  and  special  columns  will  not  be  required  in  the  cash  book.  If  all  transactions  have 
been  properly  ticketed  and  the  tickets  properly  entered,  the  cash  book  will  show  a  balance  equal 
to  the  cash  on  hand.  Counting  the  cash  and  proving  it  equal  to  the  cash  balance,  is  a  daily 
test  of  the  accuracy  of  the  teller's  transactions. 

The  General  Ledger  contains  all  accounts  of  the  bank  except  those  with  depositors  and 
certificates  of  deposit.  Some  bankers  give  certificates  of  deposit  an  account  in  the  general 
ledger,  and  do  not  enter  certificates  of  deposit  in  the  depositors'  ledger. 

We  have  chosen  a  style  for  the  general  ledger  which  is  quite  commonly  used.  Two 
accounts  can  be  placed  on  a  page,  and  thus  the  ledger  maybe  made  very  compact.  It  consists 
of  columns  for  date,  folio  of  the  cash  book,  debit  entries,  credit  entries,  and  the  balances,  written 
in  red  for  debit  balances,  and  in  black  for  credit  balances.  If  a  debit  and  credit  occur  on  the 
same  day,  they  can  be  entered  on  the  same  line,  the  date  column  being  common. 

This  style  of  ledger  is  well  adapted  to  the  general  accounts  in  the  bank,  because  there  are 
but  few  of  these,  compared  with  the  number  of  depositors,  and  the  labor  of  carrying  balances 
over  to  the  trial  balance  is  not  so  protracted. 

An   account  is  kept   with   Deposits  in   the  general  ledger,  the  total  of  the  checks  paid  or 


1 84  HIGHER  ACCOUNTING. 

certified  during  the  day  being  carried  from  the  cash  book  to  the  debit  of  this  account,  and  the 
total  of  the  deposits  received  being  carried  to  its  credit.  The  credit  balance  in  Deposits  account 
should  equal  the  total  credits  of  the  various  depositors  in  the  deposit  ledger,  or,  if  some  deposit- 
ors have  been  allowed  to  overdraw,  the  difference  between  the  total  credit  balances  of  depositors 
and  the  total  overdrafts,  will  equal  the  balance  of  Deposits  account  in  the  general  ledger. 

The  Petty  Ledger  should  be  kept  in  a  book  specially  ruled  for  its  records,  containing  tran- 
sient accounts  that  do  not  require  but  a  line  apiece.  Entries  in  this  ledger  are  itemized  very 
much  like  the  registers.  A  single  line  is  given  to  each  account.  If  a  debit  entry  is  made  first, 
the  line  opposite  on  the  credit  side  is  left  vacant  until  the  corresponding  credit  is  made,  which 
cancels  the  account ;  and  if  a  credit  is  made  first,  the  opposite  line  on  the  debit  side  is  left  vacant 
until  the  corresponding  debit  is  made.  The  total  of  the  debit  entries  in  this  ledger,  less  the 
total  of  the  credit  entries,  or  the  reverse,  if  the  credit  entries  are  the  larger,  can  be  carried  to 
the  trial  balance  with  the  title  Petty  Ledger. 

The  Trial  Balance  Book  contains  each  title  in  the  general  ledger,  the  title  Petty  Ledger, 
and  the  cash  balance,  and  the  debits  and  credits  of  these  several  titles  should  balance  when  they 
are  added. 

The  Bafik  Statement  is  given  in  the  form  usually  published  by  banks,  although  it  does  not 
enable  one  to  know  the  real  worth  of  the  bank;  because,  Expense  is  class-ed  as  a  resource,  yet 
all  of  expense  except  the  inventory  is  properly  a  loss.  Bills  discounted  are  classed  as  resources, 
and  yet  it  sometimes  happens  that  these  are  not  properly  secured,  and  that  they  are  worth  much 
less  than  the  figures  shown. 

To  ascertain  the  present  worth  of  any  business,  the  present  value  of  all  real  and  personal 
accounts  must  be  determined.  However,  such  statements  as  the  one  illustrated  are  of  great 
benefit,  because  they  enable  one  to  judge  quite  intelligently  of  the  condition  of  the  bank,  and  of 
its  sources  of  loss  and  gain. 

TRANSACTIONS. 

Mf\RGfi  4,  189    -- 

The  following  persons  have  this  day  formed  a  co-partnership  for  the  purpose  of  conducting 
a  private  banking  business  in  College  City,  any  state,  each  partner  investing  as  per  schedule 
of  nameis  below;  the  gains  or  losses  to  be  divided  according  to  the  investment  of  each.  The 
firm  title  is  Barrett,  Lindsay  &  Co. 

W.  H.  Barrett  invested  cash  ^4,000 

S.  L  Lindsay         "  "  3,ooo 

E.  A.  Parker         "  "  2,500 

J.L.Tompkins     "  "  3. 500 

H.  M.  Seeley        '•  "  4,000 

J.  H.  Bennet         "  "  3,000 

;$20,ooo 


[The  partners'  investment  accounts  should  be  kept  in  a  separate  book,  as  it  is  less  labor  to 
carry  forward  the  total  investment  in  one  account  in  the  general  ledger,  as  Capital  Stock.  If 
the  partners  should  become  depositors,  they  can  then  have  deposit  accounts  kept  separate  from 
their  investment  accounts.] 

In  recording  the  following  banking  transactions,  the  student  will  make  the  necessary  entries  in  the  auxiliary 
books,  and  will  make  debit  and  credit  tickets  for  such  transactions  as  do  not  require  entry  in  the  auxiliary  books.  At 
the  close  of  each  day  the  text  will  give  a  list  of  deposit  tickets  and  paid  certificates  and  checks  on  file  for  the  day. 
The  depositors'  ledger  can  be  written  up  from  this  report,  after  which  the  cash  book  can  be  written  up  from  the  to- 
tals in  the  depositors'  ledger  and  auxiliary  books,  the  paid  certified  checks  reported,  and  the  debit  and  credit  tickets 
filed  for  the  day. 

Paid  cash  for  one  month's  office  rent  in  advance  t"]^.     (Debit  ticket — Expense.) 
Paid  cash  for  safe  and  of^fice  fixtures  $575.     (Debit  ticket—  Office  Fixtures.) 
Paid  cash  for  books  and  blanks  for  office  use  ;^I50.     (Debit  ticket — Expense.) 
Sent   cash    to    the    Central  Bank  of  Central  City,  for  our  own  credit,  $3000.     (Remittance 
Register.)     Paid  express  charges  on  same  ;^  1.2  5.     (Debit  ticket — Expense.) 


PRACTICAL  BANKING.  185 


The  following  drafts  have  been  received  on  deposit  or  for  cash  during  the  day,  and  we 
have  forwarded  them  to  the  Central  Bank  of  Central  City  for  our  credit.  No.  359,  First  N.  B., 
Chicago,  dated  Mar.  i,  189.  .,  on  Fourth  N.  B.,  New  York,  for  ^1,000,  indorsed  by  M.  Mason; 
No.  652,  Com.  B.,  Buffalo,  dated  Mar.  i,  189.  .,  on  Marine  N.  B.,  Boston,  for  ;^900,  indorsed  by 
G.  Ryan;  No.  929,  First  N.  B.,  Peru,  111.,  dated  Mar.  2,  189..,  on  Trader's  Nat.  Bank,  New 
York,  for  ^1,200,  indorsed  by  J.  D.  Atwood. 

If  the  above  drafts  were  received  on  deposit,  they  will  appear  on  the  deposit  tickets  given  below.  If  we  gave 
cash  for  them,  it  has  merely  reduced  our  cash  balance,  and  the  only  record  required  is  in  the  Remittance  Register. 

Drew  the  following  drafts  on  our  Central  City  correspondent,  the  Central  Bank:  No.  i, 
fav.  J.  Stacey  $300;  No.  2,  fav.  J.  Springer  ;^200;  No.  3,  fav.  H.  Wentworth  ;^i 37.75;  No,  4,  to 
H.  Wentworth  fav.  Jones  &  Lane  ;^362.25,  charging  exchange  on  No.  i,  38  cts.;  No.  2,  25  cts.; 
No.  3,  17  cts.;  No.  4,  46  cts. 

Discounted  the  following  notes  and  bills:  For  W.  M.  Smith,  note  his  favor,  signed  by  R. 
C.  Crawford,  dated  Jan.  5,  due  in  two  months,  ;^  1,000.  Proceeds  cash  ;^996.50,  discount 
;^3. 50.  ..  .For  M.  Mason,  note  his  favor,  signed  by  D.  Ford,  dated  Feb.  4,  due  in  i  month, 
;^500.  Proceeds  included  on  his  deposit  ticket  below  and  counted  as  cash,  ;^499.75,  discount 
25c. 

The  following  checks  on  local  banks  have  been  received  as  cash,  and  have  been  forwarded 
to  the  banks  named  for  collection:  J.  Miner's  check  No.  i,  on  First  N.  B.,  Toledo,  indorsed 
by  J.  Burgess,  ;$375;  H.  Harting's  check  No.  7,  on  College  Bank  of  Iowa  City,  indorsed  by 
Lee  &  Avery,  ;^ 1 25.  [As  these  banks  are  not  our  regular  correspondents,  their  accounts 
should  be  kept  in  the  Petty  Ledger.] 

The  following  paper  has  been  left  at  the  bank  for  collection:  For  R.  E.  Rowley,  draft  at 
three  days'  sight  on  M.  E.  King,  Waterloo,  for  ;$238.75.  Forwarded  to  the  Union  N.  B., 
Waterloo,  to  collect  for  us.  For  G.  Stone,  note  his  favor,  signed  by  M.  Stanley,  dated  Feb.  9, 
time  30  days,  for  $500.  For  H.  C.  Cusey,  his  sight  draft  on  Starr  &  Seeley,  Clinton,  for  ;^6oo, 
forwarded  to  Clinton  Co,  Bank  to  collect  for  us.  [If  no  date  is  named  on  these  drafts,  they 
should  have  the  same  date  as  the  transaction.] 

Paid  for  postage  and  stationery  ^3.75.     (Debit  ticket — Expense.) 

The  deposit  tickets  on  file  show  the  following  deposits  received  to-day:  M.  Mason  ;^  1,600, 
J.  Burgess  ;$848.50,  J.  Ryan  $\,^QO,  J.  D.  Atwood  $1,500,  Chase  &  Smith  ;$I75,  Lee  &  Avery 
5325,  C.  Matter  ;^2i5.50,  Howard  &  Payne  $192.75,  James  York  $316.85. 

The  following  paid  checks  are  on  file  at  the  close  of  the  day:  James  York  $56,  $29.65, 
$32.25;  J.  D.  Atwood  $39.95,  $16.50,  $34.90;  M.  Mason  $95.50,  $140.50,  $29.60;  Chase  & 
Smith  $29.75;  J.  Burgess  $28.85,  ;^29.56,  $37.50. 

The  cash  on  hand  at  the  close  of  the  day  amounts  to  $18,073.10. 

The  student  should  write  up  and  balance  the  depositors'  ledger  and  cash  book,  and  post  the  general  ledger  and 
take  a  trial  balance  of  the  same.  The  total  of  the  balance  column  in  the  depositors'  ledger  should  agree  with  the  ba;l- 
ance  of  deposits'  account  in  the  general  ledger. 


The  following  drafts  have  been  cashed  or  received  on  deposit  during  the  day,  and  have 
been  forwarded  to  the  Central  Bank  for  credit:  No.  297,  Call  &  Brown,  dated  Mar.  3,  on 
Marine  N.  B.,  New  York,  for  $450,  indorsed  by  Chase  &  Smith;  No.  625,  First  N.  B.,  Tama 
City,  dated  Mar.  4,  on  Chemical  N.  B.,  New  York,  for  $350,  indorsed  by  Lee  &  Avery;  No. 
532,  Second  N.  B.,  Waterloo,  dated  Mar.  i,  on  Sixth  N.  B.,  Chicago,  for  $700,  indorsed  by  J. 
Draper;  No.  191,  Traders'  Bank,  Omaha,  dated  Mar.  2,  on  Merchants'  N.  B.,  Chicago,  for 
^1,500,  indorsed  by  Henry  Spencer. 

Drew  the  following  drafts  on  the  Central  Bank:  No.  5,  favor  H.  R.  Watkins  $300,  no 
exchange;  No.  6,  favor  H.  R.  Watkins  $200,  no  exchange;  No.  7,  $225,  No.  8,  $375,  favor 
Charles  Jones,  exchange  yi  per  cent;  No.  9,  to  H.  Green,  fav,  M,  Mason,  $127,50,  exchange 
yi  per  cent. 

Discounted  the  following  notes  and  bills:     For  C.  Matter,  note  his  favor,  signed  by  J.  Mor- 


1 86 


HIGHER  ACCOUNTING. 


niSCOLTST 


^•<LXa^<tf— 


ci>^ 


a>c. 


}Mi^J>.,'uU  (?'^-'^-^^^ 


yvxoAj. 


hoU 


'ho-a. 


4}.yh 


aJXnAy 


,\^-Ctv-tJUf_ 


II 

/I- 


COT^I^BCTION 


(^< 


<«_*<_t,-A^ 


iiZ-ttt^V.^^    (/^0_»^  »..*-C«^ 


c?.  6i^-^>: /  <£^.-^ 


>?f 


vT 


v3 
/ 

7 


(R.H  Ljcc 


"^ 


ytC* 


£€S««.«^wo' 


/^— 


i^.  >7.  /3.  UJaXX^U.,-,^ 


^~j3*^.j^ 


■^cOjU^ 


CASH 


•..,-G> 


0^0^ 


^3-v~e  oC<yCo-^  >2*-c£*-4^ 


i<r>t£o..-v....«>c* 


^<w. 


^^..-aJUr  <^2l-«-<-«„Oi-'o' 


^^ 


rJi-^.Aj.-^-''-'-^-*^ 


<_-ot^aj«-'v-^ 


^ 


^a£-« 


2oooo 


4.G 


7vr7r 


fe/ 


6  / 


PRACTICAL  BANKING. 


187 


RBnrsTBJ^. 

>Lo. 

UJ-kjui^i-uj^ 

oSLut-c^M^/n/- 

^«^c^ 

4^ 

6x'H--C.<ft,<,^^^ 

^£U.uif. 

(UriK. 

^\.ey^-x<.^aAJiu^ 

/ 

Iff  — 

s5- 

z  yHe. 

/rf- 

r 

^  <x^. 

1  00  0 

- 

- 

/  a  0  0 

3 

<So 

X 

^ 
i 

7 

■5'o  0 

— 

— 

•■S~o  0 

Q.J 

9<^y^ 

/  •6~ao, 

3 

7^ 

3 

■3Z-f 

- 

- 

^^-r 

2<S 

(^-^% 

f 

^-^ 

fa. 

30  cLiL, 

~hnaA^. 

^7 

/  Hdi., 

foo 

- 

- 

^0  0 

^ 

S3 

o~ 

<2.iir 

yi" 

3  a  cCa, 

yiAoAj. 

/<3 

^"U^. 

J-rc 

, 

__ 

7-5-0 

7^ 

1 

- 

/f/cr 

■  7 

6-/ 

1 

KBGFSTBH. 


UIJUji.^, 


3"^  6j-«« —  c.x««,.x*< 


c^  *UJ.         (p. 


iJU^     cCt 


/if— 


t4- 
1 

3 


3  «t^ 


4 


4  o  o 
2.6J- 
S~o  o 


2  s- 


^o 


7-^ 


BOOK. 


«7-a--C4^ 


c^W' 


J,*lC^  CZX^ci..^ 


&)cJqj^ ^-ft,.,^ 


3.3  0 

(of  o  o 

/•i~o  O 

Soo 

(a  00 


^/ 


fSoJ- 


s.y^f% 


(,f 


i88 


HIGHER  ACCOUNTING. 


UBFOSITORS' 


if^^"-  D-Z-t-»/  c£Lji. 


^a>N^     ^,    /g-f- 


i^ii  c«.^Ji^ 


?>;  a>\^   vj  ,    /  ^/— 


(7         '    ■   ■ 


7-r         J-f 


J2.fe^  4o 


//7 


<oOO  S-f 


32.  s 


f" 


ir^y  i 


/  t/s-  s^ 


/fa. 

■  l^ij 

/'/oo 


^f7J 


7-^ 


6  fe 


.20Lf 


xxt 

I  3s 
61 

1/  (o 


I  Of  «> 


7-5 


■i? 


I  If 


f¥- 


j.zr  3J- 


IH-Ts- 


i  I  S' 


><t  1  7 


6/- 


?" 


Debits. 


PBTTY 


/rf— 


i 

v5" 


^7^ 


Tiro  accounts  from  the  General  I.0dger, 


^2^ 


4 


Jt-^ 


■,**XU- 


(>/o. 


>r/. 


fa  s  7a 


Y<.tv  I. 


c?^. 


oiU4-U^ 


6  oo 

i-S-lf 
3(cfo 


Cv^»6U- 


■i-1-iy 


7° 


^7  7^ 
7«/^7 

x3~8'<'7 


^7 


PRACTICAL  BANKING. 


189 


I^BDGBR. 


H;  o.y  4    /  g-y 


Ht,o^>-/;    y,    /  j-f 


C^A..«-<jC^-y 


>^T  »j^.   j-,    /  iy  — 


J-^i^,  Cl^,^       .i^  tt-a^Jii^ 


"^IJi&Z"     <?»«XC*«Jl     JS<f.*^Ui:       Q-rJU^-...^ 


J.^itCA-/..B 


V-r 


fW 


^  O  VL 


6  /O    J. 


^^7 


oc 


7/- 


I^BDGBR. 


Credits. 


t,      '3u.A^  'h .  A^.   ^-^-Za^-^i^ 


4, 


(/3a^-J'<^ 


oS^  u^.  >}.  e.   ?7,  V.  ^J7^^-  <£:^c£,<s^ 


.<9^   /^   ??./?.    Cl.Ji^^j^^/7<..'-'  CkJ!..'--^ 


3/J-- 


/76 


T/ie  ContintiGd  Trial  Bala  noe. 


Aiar.  O. 


-<S) -x^jo^ubctJ^    JLt>-tJcJ 


jc,^_   Q.:,..^<y' 


Jr/r 


/Toy  3 


3 


•7S- 


b  vy 


^^1 

2, ;  o  o 


/■  / 


'  7 
i-  4. 


vJ"7vr 

3  OvTo 
/'^J.s-y 


/  / 


ygAi 


3.yzYi- 


'7 


¥-r 


7  3 


190 


HIGHER  A  CCOUNTJ]>'G. 


RBMlTTANCE    RBGISTBR. 
Remitted  to  t2io  Central  Bank  for  Credit. 


^S-iJ^  iu-w^ 


c^.U^ 


'^ 


o&^^ 


ek  OL-C^  . 


/  rf- 


f2f 


-fa 


/^'-a?-  ?7.  ;?.  >?.  4'. 


>J^.   9^1 


^. 


?■ 


(,  /o  o 


DRAFr  REGISTER. 
Oratts  Drawn  on  tb.e  Central  Bank. 


^<tCir  i,^->-ta.»»vv. . .  ??o 


^o    Of^-..-,..^    ,i--^ 


X,    O'S&^.r^.^    (Pci^.M. 


die 


J-^-Ciji.  ^. 


€k^ 


V 


^ 


X^ 


'^X» 


3,00 
J  (,x 


y 


7^ 


3? 


CERrtlElCATES  OF  DEPOSIT. 


oS~ajC^S<tni<a  «(^ 


"^o. 


J^     W-?..,,^^!!*^...,^ 


^     CJJ 


^*T 


.■i^ 


Z^rA^^^v^  (?k^ 


/  rf- 


y^, 


lT 


5. 
6 


x^Y- 


C/l/VA.•'V^-«*^^ 


J/^  J4<-<U^ 


37^ 


2o  rfc 


7-^ 


/  s-f- 


J~o 


CERTIFIED  CHECKS. 


oB^oCta^ 


Lv-'ii-i.^^t-a-B^^   C.-<^'~a—<Jx_^ 


o7^     LOL^^r-.^    (jL^aM^ 


"T" 


// 


/f 


a  o 


^7 
{00 


PRACTICAL  BANKING. 


191 


BA2VK  STATBAfBiVr. 


yJOyfO 


S,7  9^'S 


¥-% 


^oM:.jc:JU  IJLS^-Jky 


ft 


rLTJt^S 


'fi 


xC 


7 


r-3 


gan,  dated  Jan.  3,.  due  in  two  months,  ^325.  Proceeds  included  on  his  deposit  ticket,  1^324.75,  dis- 
count 25c.  For  H.  Jennings,  note  his  favor,  signed  by  S.  Smith,  dated  Feb.  12,  due  in  30 
days,  |{8oo.  Proceeds  cash  ;^793.47,  discount  $^.^l.  For  Lee  &  Avery,  note  their  favor,  signed 
by  Austin  &  Smith,  Vinton,  dated  Feb.  5,  due  in  30  days,  ;^750,  Proceeds  cash  $748.27,  dis- 
count 73c,  expense  of  collecting  ;^i.  (Credit  Collection.)  Forwarded  to  First  N.  B.,  Vinton,  to 
collect  for  us. 

Received  for  collection:  For  James  Sumner,  note  signed  by  D.  A.  Minot,  indorsed  by  James 
Dougall,  dated  Feb.  3,  due  in  one  month,  $265.  For  H.  Heald,  note  signed  by  R.  H.  Stacey, 
indorsed  by  M.  Powers,  dated  Feb.  3,  due  in  one  month,  ;^500.  For  J.  Graves,  his  draft  at  4 
days,  dated  Mar.  4,  on  Stacey  &  Stevens,  Chicago,  $400.  For  J.  Ryan,  his  sight  draft  on  I.ane 
&  Co.,  Cedar  Falls,  1^275.  [Forwarded  this  draft  to  the  Com.  B.,  of  Cedar  Falls,  to  collect  for 
us.]  For  Chase  &  Smith,  their  sight  draft  on  Ladd  &  Co.,  Chicago,  for  1^175.  [Forwarded 
the  two  Chicago  drafts  to  the  Third  N.  B.,  Chicago,  for  collection  and  returns.] 

The  following  checks  on  local  banks  have  been  received  as  cash,  less  collection  charges, 
and  we  have  forwarded  them  to  the  banks  named,  for  collection:  H.  Parton's  check  No.  29, 
drawn  on  the  Com.  B.,  Vinton,  dated  Mar.  4,  for  $176.50,  indorsed  by  C.  Jennings,  and  identi- 
fied by  C.  Matter;  J.  C.  Lee's  check  No.  193,  drawn  on  the  Union  N.  B.,  of  Mt.  Vernon,  dated 
March  2,  for  $200,  indorsed  by  J.  D.  Atwood.     Collections  deducted  from  these  checks,  $1.50. 

Paid  cash  for  coal  for  heating  office,  1(19.  Paid  bookkeeper's  salary,  $20.  Paid  cash  for 
20  shares  ofB.  C.  R.  stock  @  105,  $2,100. 

Received  the  following  deposits  this  day  per  tickets:  E.  C.  James  $229.50,  James  York 
$1 16.95,  Myron  Taft  $228.35,  Howard  &  Payne  $1 19.25,  C.  Matter  $356.50,  Chase  &  Smith 
$56.50,  Lee  &  Avery  $298.75,  J.  D.  Atwood  $595,  J.  Ryan  $200,  M.  Mason  $137.75,  Charles 
Jones  $212.50,  for  which  we  gave  our  Certificate  of  Deposit  No.  i. 

Paid  depositors'  checks  per  checks  filed:  M.  Mason  $32.25,  $29.75,  $13.75,  ^59-25;  J.  D. 
Atwood  $129.50,  $28.75,  $16.75,  $29.25;  J.  Ryan  $125;  Lee  &  Avery  $228.75;  C.  Matter 
$28.75,  $10,  $29.64;  Howard  &  Payne  $52.25,  $66.80;  E.  C.  James  $100;  Myron  Taft  $1 16.50. 

The  cash  on  hand  at  the  close  of  the  day  amounts  to  $13,375,13. 


Received  the  following  for  coUection:  For  H.  Turner,  note  dated  Feb.  17,  time  15  days, 
signed  by  George  Strand,  for  $275;  For  J.  C.  Jones,  his  sight  draft  on  T.  C.  Roberts,  Clear 
Lake,  dated  to-day,  $195.50.  Forwarded  Jones's  draft  to  Union  Bank  of  Clear  Lake  to  collect 
for  us. 

Received  from  ist  N.  B.,  Toledo,  their  draft  No.  929  on  Union  N.  B.,  of  New  York,  dated 
Mar.  5,  for  $374.50,  being  the  amount  of  Miner's  check  sent  them,  4th  inst.,  less  exchange  50 
cents.     (Credit  ist  N.  B.,  Toledo,  with  $375,  and  debit  Collection  with  50  cents.) 

Received  from  Clinton  Co.  Bank  their  draft  No.  291,  on  Fourth  N.  B.,  Chicago,  dated  Mar.  5, 
for  $599.25,  for  Col.  No.  3,  less  exchange,  and  we  have  this  day  written  a  certificate  of  deposit 
favor  H.  C.  Cusey  for  the  proceeds,  $598.50,  reserving  the  remainder  for  our  collection  fee. 


192  HIGHER  ACCOLN TING. 

Collection  No.  4  paid  to-day,  and  a  certificate  of  deposit  favor  Sumner  has  been  written  for 
the  .proceeds,  $264.2^  .  .  .  .Collection  No.  5  paid  to-day,  and  a  certificate  of  deposit  written  favor 
H.  Heald  for  the  proceeds,  $4g?).y$. 

Discount  No.  3  paid  to-day Sold  10  shares  B.  C.  R.  Stock  for  cash  @  125,  ;^  1,2 50. 

Received  from  Com.  Bank,  Vinton,  their  draft  No.    615,    on    ist    N.    B.,    Chicago,    dated 
March  5,  for  ;^  176.23,  being  the  amount  of  Parton's  check  sent  them  5th  inst.,  less  exchange 
cents. 

Forwarded  the  bank  drafts  received  to-day,  to  our  Central  City  correspondent,  as  usual. 

Cusey,  Heald  and  Sumner  have  each  called  and  received  cash  for  the  certificates  of  deposit 
issued  payable  to  them  this  day. 

Received  the  following  deposits  this  day  per  tickets:  J.  D.  Atwood  ;^96.50,  E.  C.  James 
;^50.50,  Lee  &  Avery  ;^i  59.50,  M.  Mason  ^225.75,  James  York  1^96.75,  J.  Burgess  ;^98. 70, 
Howard  &  Payne  ;^  109. 50,  Howard  Smith  ;^350,  for  which  we  gave  our  certificate  of  deposit 
payable  to  Joshua  French;  John  Talt  ;^375,  for  which  we  gave  our  certificate  of  deposit. 

Paid  depositors'  checks  per  checks  filed:  Chase  &  Smith  ;^I29  50,  I33.75,  $44.2^,  E.  C. 
James  ;^29.75,  ;^i62. 25;  J.  D.  Atwood  ^29.20,  ;^45.75,  ;^33.88,  ^169.50;  Lee  &  Avery  ;^29.75, 
;^46.50,  ;^75;  C.  Matter  $\g.20,  ^39.85,  ;^57.75;  Charles  Jones,  certificate  of  deposit,  ;^2i2.50. 

Cash  on  hand  at  the  close  of  business  to-day  amounts  to  1^14,757.45. 

Received  the  following  deposits  this  day  per  tickets:  James  York  ;g  169.60,  Myron  Taft 
;^93-65,  Chase  &  Smith  1^229.50,  E.  C.  James  ^300,  J.  Ryan  ;^375,  H.  Sanger  ;^500,  for  which 
we  have  issued  our  certificate  of  deposit  in  favor  of  R.  Keyes;  C.  Jenks  ;^6oo,  for  which  we  have 
issued  our  certificate  of  deposit  in  favor  of  B.  Parks. 

Paid  depositors'  checks  per  checks  filed:  J.  D.  Atwood  1^250,  $1  25;  J.  Ryan  ;^ 500,  $625; 
J.  Burgess  ;^3 15.04,  ;^430.25;  C.  Matter  ^220,  ;^io6.3i,  $7^)  Howard  &  Payne  ;^56.50,  $45.95; 
M.  Mason  1^150,  ;$225, 1^87.90;  Lee  &  Avery  ;^56. 13,  ;^47. 1 2;  Chase   &  Smith  ;^375.     Discount 

No,  2  paid  to-day  by  D.  Ford  ;^500 Cash  on  hand  at  the  close  of  business  to-day  amounts 

to;^i3,835. 

8 

Paid  B.  Parks  to  apply  on  his  certificate  of  deposit  ;^200,  and  issued  a  new  certificate  of 
deposit  for  the  balance.     Paid  J.  Taft  in  full  of  his  certificate  of  deposit,  ;^375. 

Collection  No.  9  paid,  and  H.  Turner's  net  proceeds  entered  as  a  certificate  of  deposit  in  his 
favor,  1^274,  our  charges  for  collection  being  $1. 

Received  from  Union  Bank  of  Clear  Lake,  their  draft  No,  2621,  on  Tenth  N,  B,,  New  York, 
dated  7th  inst.,  for  $194.80,  proceeds  of  collection  No.  10,  sent  them  6th  inst.  We  have  de- 
ducted a  total  collection  fee  of  $1.00,  and  have  written  our  certificate  of  deposit  in  lavor  of  Jones 
for  the  proceeds,  $194.50. 

Paid  cash  for  the  follow  ing  sight  drafts  on  Central  City  firms,  which  we  have  discounted: 
For  A.  Preston,  drawn  on  Stacey  &  Wentworth,  $100,  proceeds  $99.50;  for  A.  Learner,  drawn 
on  Lse  &  Somers,  $125.  proceeds  $124.37. 

Remitted  to  the  Central  Bank  for  credit,  the  bank  draft  received  and  the  two  sight  drafts 
discounted  this  day,  the  latter  being  estimated  at  their  face  value. 

Received  the  following  deposits  this  day  per  tickets:  J,  D.  Atwood  $100,  J,  Burgess  $220, 
J.  Ryan,  $256.50,  C.  Matter  ;f,225,  Howard  &  Payne  $125,  Chase  &  Smith  $126.50. 

Paid  depositors'  checks  per  checks  filed:  J.  D.  Atwood  $25.20,  $16.35,  $1  '0-55;  Chase  & 
Smith  $210;  Howard  &  Payne  $105,  $225;  James  York  $227,50,  $49-85;  Myron  Taft  $12.50, 
$37.50,  $210;  M.  Mason,  $49,  $47.25;  Lee  &  Avery  $29.75,  $48.50;  E.  C.  James  $20,  $123.29. 

Cash  on  hand  at  the  close  of  business  to-day  amounts  to  $12,816.89. 

The  student  may  make  a  statement  like  the  one  given  March  6,  without  closing  the  gen- 
eral ledger. 

In  the  illustrated  forms  we  have  given  the  deposit  ledger  for  Monday,  Tuesday  and  Friday, 
leaving  the  student  to  fill  out  the  intervening  days;  we  have  also  given  the  continued  trial  bal- 
ances, showing  the  results  of  the  general  ledger  accounts  for  the  first  three  days. 

We  have  given. transactions  for  only  five  days  in  each  week,  because  this  arrangement  har- 
monizes with  the  rulings  used  in  the  books  of  the  college  banks,  where  business  is  usually  tran- 
sacted only  on  the  regular  school  days. 


PRACTICAL  BANKING.  193 

II 

Received  of  the  Union  N.  B.,  Waterloo,  their  draft  No.  1256  on  the  Mechanics'  Bank  of 
New  York,  dated  9th  inst.,  for  ;^238.50,  the  proceeds  of  collection  No.  i.  [Debit  Collection  for 
the  balance.]  Wrote  a  certificate  of  deposit  favor  Rawley  for  the  proceeds  of  above  collection 
after  deducting  75  cents  from  the  face.  The  Union  N.  B.,  Waterloo,  also  sends  us  the  following 
papers  to  collect  for  them,  each  bearing  date  of  the  9th  inst.:  Demand  draft  of  Jones  &  Co. 
on  Carr  &  Smith  of  our  city  for  ;^96.5o;  sight  draft  of  Lane  &  Lewis  on  Bentley  &  Brown  of 
our  city,  for  $125;  draft,  atone  day's  sight,  of  Lane  &  Lewis  on  Davis  &  Evans  of  our  city,  for 
1^150.25. 

Received  a  dividend  from  the  B.  C.  Railway  of  ^5  per  share  on  10  shares  of  stock  now  on 
hand.  .  .  .Paid  cash  for  postage  and  stationery,  ;^3.75. 

Received  from  the  College  Bank  of  Towa  City,  their  draft  No.  2917  on  Merchants'  National 
Bank,  New  York,  dated  9th  inst.,  for  the  proceeds  of  Harting's  check  sent  them  4th  inst.,  after 
deducting  exchange  10  cents. 

Received  cash  on  discount  No.  i,  :^500,  and  also  for  interest  on  ^500  for  3  days  at  8  per 
cent  per  annum,  and  a  new  note  of  30  days  dated  8th  inst.,  signed  by  R.  C.  Crawford,  in- 
dorsed by  W.  M.  Smith,  for  the  remaining  ;^500,  receiving  cash  for  the  discount,  (interest  in  ad- 
vance) on  the  new  note  33  days  at  8  per  cent  per  annum. 

Exchanged  one  of  our  office  desks  for  a  larger  one,  paying  ;^22.50  for  the  difference  in 
price. 

Sold  drafts  on  the  Central  Bank  as  follows:  To  Lee  &  Avery,  favor  Hoyt  &  Sherman, 
;^I25.20,  receiving  cash  for  the  face  and  for  exchange  15  cents;  to  J.  Burgess,  favor  J.  M.  Bur- 
gess, ;^  107.50,  receiving  cash  for  the  face  and  for  exchange  10  cents. 

Received  the  following  deposits  to-day:  J.  Burgess  ;^56. 50,  E.  C.  James  $\\<^,  Chase  & 
Smith  ;$72.2  5,  Myron  Taft  ;$ioo,  James  York  ^65,  Howard  &  Payne  ;^ioo. 

Paid  depositors'  checks  to-day  as  follows:  J.  Ryan;^72  5,;^37.50, ;^2  30;  J.  D.  Atwood;^29.75, 
$43.82;  C.  Matter  ;^ii5,  ;^28.5o;  Lee  &  Avery  ;^I5;  M.  Mason  ;^900,  1^87.50. 

Certified  checks  for  J.  D.  Atwood,  No.  19  in  favor  of  H.  E.  Sumner  $59.50,  No.  20  in 
favor  of  J.  A.  Bunnel  $40.50. 

Remitted  to  the  Central  Bank  for  credit,  all  bank  drafts  received  to-day. 

The  cash  on  hand  at  the  close  of  business  to-day  amounts  to  $1 1,878.27, 

Paid  cash  for  $12,500  of  the  Electric  Railway  Bonds  at  80  cents  on  the  dollar. 

Received  from  the  First  N.  B.,  Vinton,  their  draft  No.  121  5  on  the  Ninth  N.  B.,  Chicago, 
dated  i  ith  inst.,  for  the  proceeds  of  discount  No.  5  after  deducting  exchange  50  cents.  [Debit 
Collection.] 

Received  from  the  Union  N.  B.,  Mt.  Vernon,  their  draft  No.  1856  on  the  First  N.  B.,  Bos- 
ton, for  $199.50,  dated  iith  inst,,  for  proceeds  of  Lee's  check  sent  them  5th  inst.  [Make  a 
ticket,  debiting  J.  D.  Atwood  with  the  balance  of  this  check,  since  you  allowed  Atwood  the  face 
value  of  the  check.] 

Sold  to  the  Electric  Railway  Co.  for  cash,  three  drafts  on  the  Central  Bank,  as  follows: 
Favor  Ryan  &  Co.  $2000,  favor  Lee  &  Grant  $2000,  favor  Kennedy  &  Co.  $2000,  charging  no 
exchange. 

Received  from  the  Third  N,  B,,  Chicago,  thejr  draft  No,  2917  on  the  Central  Bank  of 
Central  City,  dated  1  ith  inst.,  for  $574.50,  being  the  net  proceeds  of  collections  Nos.  6  and  8. 
[Debit  collection  with  the  difference,]  Charge  for  collection  fee  on  No.  6,  $1,  and  on  No.  8,  50 
cents,  and  credit  the  firms  for  whom  these  collections  were  made  with  the  proceeds  as  deposits. 

Received  payment  of  collections  Nos.  11,12  and  13,  and  forwarded  our  draft  on  the  Cen- 
tral Bank  to  the  First  N.  B.,  Waterloo,  for  the  proceeds  after  deducting  75  cts.  exchange. 

Received  deposits  as  follows,  in  addition  to  those  already  named:  Myron  Taft  $51,  M. 
Mason  $175,  C.  Matter  $200,  J.  Ryan  $180,  P^lectric  Railway  Co.  $4000. 

Among  the  above  deposits  the  following  local  checks  on  neighboring  banks  were  received 
and  counted  as  cash,  less  a  total  collection  fee  deducted,  amounting  to  $2.50,  which  should  be 
credited  to  Collection:  H.  Sherman's  check  No.  95  on  Commercial  Bank,  Belleville,  for  $100, 
indorsed  by  Chase  &  Smith;  G.  Preston's  check  No.  39  on  the  Citizen's  Bank,  Wheatland,  for 


194  HIGHER  ACCOUNTING. 

;gi25,  indorsed  by  M.  Mason;  R.  Smith's  check  No.  42  on  Merchants'  Bank  of  Preston,  for 
^80,  indorsed  by  J.  Ryan.     Forwarded  these  checks  to  the  banks  named,  for  collection. 

Paid  depositors'  checks  as  follows:  J.  Burgess  1^250,  $\ZT,  Howard  &  Payne  $']2.^o, 
^22.25;  Lee  &  Avery  $\  50,  ;^57;  James  York  ;^300,  $27.75.  Paid  B.  Parks  for  his  certificate  of 
deposit  ;^400.  • 

Certified  checks  for  the  Electric  Railway  Co.,  No.  i  favor  J.  G.  Crisman  ;^300,  No.  2  favor 
M.  M.  Preston  ;^200.  Paid  certified  checks  favor  H.  E.  Sumner  ;$59.50,  favor  J.  A.  Bunnel 
;^40.50,  issued  on  the  nth  inst. 

Forwarded  all  bank  drafts  received  to-day  to  the  Central  Bank  for  credit  as  usual. 

The  cash  on  hand  at  the  close  of  business  to-day  amounts  to  ;^i  1,037.02. 

13 

Paid  cash  for  20  shares  B.  C.  R.  Stock  sit  1 10. ..  .Sold  ;^ 5000  of  the  Electric  Railway 
Bonds  at  95  cents  on  the  dollar,  receiving  cash. 

Discounted  notes  and  bills  as  follows:  For  J.  Burgess,  note  his  favor  signed  by  Robert 
Payton,  dated  Feb.  12,  due  in  one  month,  for  ;^275;  discount  $2.50,  proceeds  paid  in  cash. ,  .  . 
For  E.  C.  James,  his  draft  at  2  months  from  date  on  Martin  &  Moore,  Chicago,  dated  Jan.  13, 
for  ;^300;  discount  1^1.75,  proceeds  deposited.  .  .  .For  J.  York,  note  his  favor,  signed  by  Hiram 
Norton,  dated  Mar.  i,  and  due  in  30  days  from  date,  for  ;^475.50;  discount  1^3.50,  and  we  have 
given  him   drafts   on   the   Central   Bank  favor  Lane  &  Lewis  1^274.50,  favor  Avery  &  Baker 

;^ 1 96.7 5,  charging  as  exchange  on  the  two  drafts,  75  cents .Forwarded  James's  draft  to  the 

Fourth  N.  B.,  Chicago,  to  collect  for  us. 

Cashed  the  following  local  checks  for  C.  Matter  who  has  indorsed  each,  deducting  a  col- 
lection fee  of  ;^  1.7  5,  from  the  total  amount  of  the  checks:  D.  Dent's  check  No.  37  on  the  Peo- 
ple's Bank  of  Trenton  for  $\  17.50,  E.  Ford's  check  No.  1 19  on  the  Exchange  Bank  of  Albion, 
for  $214.25.     Sent  these  checks  to  the  banks  named,  for  collection. 

Received  from  the  Commercial  Bank,  Cedar  Falls,  their  draft  No.  2919  on  the  Fourth  N. 
B.,  New  York,  dated  12th  inst.,  for  the  proceeds  of  collection  No.  7,  after  deducting  exchange 
50  cents.  [Make  a  deposit  ticket  favor  J.  Ryan,  for  $273.75,  and  a  ticket  crediting  Collection 
for  the  balance.] 

Received  the  following  deposits  in  addition  to  those  of  E.  C.  James  and  J.  Ryan  already 
named:  J.  Burgess  $129,  Myron  Taft  $200,  Lee  &  Avery  $100,  Howard  &  Payne  $90;  B.  F. 
Curtis  $225,  for  which  we  gave  certificate  of  deposit,  and  R.  E.  Sawyer  $170,  for  which  we 
gave  certificate  of  deposit. 

Paid  depositors'  checks  as  follows:  Electric  Railway  Co.  $29.75,  $275,  $50,  $417.75; 
J.  Graves  $1 1 5,  $27.50;  J.  Ryan  $1  5.50,  $87.75;  Chase  &  Smith  $300,  $22.75. 

Received  the  following  paper  for  collection:  Draft  at  3  days'  sight,  dated  to-day,  drawn 
by  E.  C.  James  on  Brown  &  Jones,  of  Elmira,  for  $275.50,  to  collect  for  E.  C.  James,  which  we 
have  forwarded  to  the  First  N.  B.,  Elmira,  to  collect  for  us;  note  at  30  days,  signed  by  J.  D. 
Atwood,  dated  Feb.  12,  for  $300,  payable  to  Rogers  &  Lambert  and  indorsed  by  them  to  the 
Fourth  N.  B.,  Chicago,  for  whom  we  collect. 

Paid  cash  for  janitor  work  in  bank,  $3.50. 

Remitted  to  the  Central  Bank  for  credit  all  bank  drafts  received  to-day. 

The  cash  on  hand  at  the  close  of  business  to-day  amounts  to  $12,554.02. 

14 

The  Commercial  Bank  of  Belleville,  has  returned  H.  Sherman's  check  unpaid,  and  we  have 
returned  tiie  same  to  Chase  &  Smith,  charging  it  as  a  paid  check. 

The  Merchants'  Bank  of  Preston,  has  sent  us  their  draft  No.  916  on  the  Central 
Bank  of  Central  City,  dated  13th  inst.,  for  the  proceeds  of  R.  Smith's  check  after  deducting  ex- 
change 25  cents.     [Debit  this  to  Collection.] 

Discounted  paper  as  follows:  For  J.  D.  Atwood,  note  his  favor,  signed  by  D.  Sherman, 
Central  City,  dated  Jan.  14,  payable  2  months  after  date,  for  $500,  bearing  interest  at  6  per  cent. 
Estimating  interest  to  maturity  $2.50,  and  discount  35  cents,  we  have  given  him  credit  on  de- 
posit for  the  proceeds,  $502.15 For  C.  Matter,  his  sight  draft  on  Miner  &  Mann  of  Central 

City,  dated  to-day,  for  $275.25,  deducting  as    discount  $1.75,  and  paying  him  the  proceeds  in 


PRACTICAL  BANKING.  195 

two  bank  drafts,  one  for  $\  50  payable  to  C.  E.  Jenkins,  one  for  $123  payable  to  R,  A.  Sones, 
the  balance  being  kept  for  exchange.  . .  .For  Myron  Taft,  note  his  favor,  signed  by  B.  O.  West, 
dated  Mar.  i,  payable  60  days  after  date,  for  $600,  estimating  $6  discount,  we  have  given  him 
credit  on  deposit  for  ;$300,  and  a  draft  on  the  Central  Bank  for  ;^293.5o,  charging  exchange  50 
cents. 

M.  Stanley  has  paid  collection  No.  2  due  this  day,  and  we  have  deducted  ;^2.5o  for  col- 
lection fee,  selling  G.  Stone  a  draft  on  the  Central  Bank  for  $200,  no  exchange,  and  giving  him 
our  certificate  of  deposit  for  the  balance  of  the  proceeds. 

Exchanged  our  safe  for  a  larger  one,  paying  cash  for  the  difference  in  price,  ;^75. 

Paid  the  following  checks:  J.  D.  Atwood  ;^I29.50,  ;^28.83,  ;^56.50;  James  York  ;$29,75, 
;^I4.25;     Chase  &  Smith  ^15.50,  ;^27.6o,  besides  the  debit  for  returned  check;  M.  Mason  ;^i50, 

;^29. 15.  $32.12;  C.  Matter  ;^32. 87,  $\^.6^\  Electric  Railway  Co.  1^287.50,  $485,  ;^2I7.2S 

Paid  certificate  of  deposit  favor  Joshua  French  ;^350,  and  certificate  of  deposit  favor  H,  Turner 
;^274.  . .  .Paid  the  check  favor  Bond  &  Co.,  which  we  certified  on  the  12th  inst.,  ;^500. 

Received  the  following  deposits  besides  the  proceeds  of  the  two  discounts  named  above: 
Chase  &  Smith  ;g35o,  M.  Mason  ;^ioo,  James  York  $'^'j.^o,  A.  V.  Turner  $250,  for  which  we 
issued  a  certificate  of  deposit. 

Among  the  deposits  to-day  were  the  following  bank  drafts,  which  we  have  remitted  to  the 
Central  Bank,  together  with  all  other  bank  drafts  received  to-day:  Draft  No.  3196  drawn  by  the 
Ninth  N.  B.,  Cleveland,  on  the  Chemical  N.  B.,  Philadelphia,  dated  1  ith  inst.,  for  ;^300,  indorsed 
by  Chase  &  Smith;  Draft  No.  299  drawn  by  the  People's  Bank  of  Syracuse  on  the  First  N.  B., 
Chicago,  dated  12th  inst.,  for  ;^200,  indorsed  by  A.  V.  Turner. 

The  cash  on  hand  at  the  close  of  business  to-day  amounts  to  ;^io,59i.o5. 

15 

The  Citizens'  Bank  of  Wheatland,  sends  us  their  draft  No.  1274  on  the  Third  N.  B.,  New 
York,  dated  14th  inst.,  for  ;^i 24.50,  being  the  proceeds  of  Preston's  check,  sent  them  for  col- 
lection. 

Sold  the  following  drafts  on  the  Central  Bank  for  cash:  To  M.  Mason,  favor  Earl  &  Mar- 
tin, ;$200,  exchange  25  cents;  to  J.  D.  Atwood,  favor  Smith  &  Moore,  ;^i  15,  favor  Wright  & 
Hunt,  ;^I75,  exchange  on  the  two  40  cents;  to  E.  C,  James,  favor  self,  $125,  favor  C.  C.  Jen- 
nings, $300,  exchange  on  the  two  75  cents. 

Discounts  Nos,  4  and  7  have  been  paid  to-day. 

Sold  10  shares  B.  C.  R.  Stock  at  130,  receiving  cash. 

Paid  for  bookkeeper's  wages  ;^50. 

Discounted  the  following  paper  for  our  depositors,  in  each  case  giving  them  credit  on 
deposit  for  the  proceeds:  For  Chase  &  Smith,  note  their  favor  at  30  days  from  Mar.  i,  signed 
by  R.  E.  Grant,  for  ;^300,  estimating  the  discount  $1.25;  for  Howard  &  Payne,  their  draft  at 
30  days  from  Mar.  11,  on  Starr  &  Seeley,  of  Central  City,  for  ;^2 50,  estimating  the  discount 
;^i.5o;  for  James  York,  note  his  favor,  signed  by  A.  R.  Raines,  dated  Feb.  20,  at  30  days,  for 
;^400,  estimating  discount  $1.75 .  .  .  .Forwarded  the  draft  on  Starr  &  Seeley  to  the  Central  Bank 
to  collect  for  us. 

Paid  cash  for  railing  placed  on  bank  counter,  1^37.50. 

Sold  $2,QOO  of  the  Electric  Railway  Bonds  at  lOO  cents  on  the  dollar. 

Discounted  the  following  sight  drafts  on  Central  City  firms:  R.  E.  Martin's  draft  on 
Crone  &  Dailey  for  ;^275,  C.  A.  Carter's  draft  on  Strong  &  Black  for  ;$225,  both  of  these  drafts 
being  in  favor  of  J.  D.  Atwood  who  indorsed  them  to  us,  receiving  cash  for  the  proceeds  after 
allowing  a  discount  of  ;^2. 50. 

Forwarded  all  bank  drafts  received  to-day  with  the  two  sight  drafts  last  named,  to  the 
Central  Bank  for  credit. 

•  Received  other  deposits  besides  those  of  Chase  &  Smith,  Howard  &  Payne,  and  James 
York  already  named,  as  follows:  J.  Burgess  ;^75,  M.  Mason  ;Si22,  C.  Matter  $119.50,  Lee  & 
Avery  $129.50;  Henry  Bennett  $200  for  which  we  issued  certificate  of  deposit,  George  Strand 
$300  for  which  we  issued  certificate  of  deposit. 


196 


HIGHER  ACCOUNTING. 


Paid  depositors' checks  as  follows:  J.  D.  Atwood  $1  29.17,  ;^22.33;  E.  C.  James  ;^73.50, 
^22.18,^212.75;  J.  Ryan  ;^ I  29. 1 6,  ;^22  5;  J.  Graves  $29.15,  ;^  102.10;  Myron  Taft;^i  13.12,  $38.1  5, 
;^26.23;  Electric  Railway  Co.  ;^5  19.50,  ;?237.75,  ;^i  26.19;  and  we  have  also  paid  certificates  of 
deposit  favor  R.  Keyes  ;$500,  favor  J.  C.  Jones  ;^i94.5o. 

The  cash  on  hand  at  the  close  of  business  to-day  amounts  to  ;^  13, 542.67. 

The  student  may  render  a  statement  showing  the  actual  resources  and  habilities  of  the 
bank  after  taking  into  account  the  following  inventories: 

20  shares  of  B.  C.  R.  Stock  worth  $\  12.50  per  share;  ;^5500  of  Electric  Railway  Bonds 
worth  100  per  cent;  Office  Furniture  now  worth  $700;  Books  and  Stationery  worth  $125;  we 
owe  on  Salaries  ;^27.50,  on  Rent  $75. 

If  $1,045.24  is  reserved  as  a  surplus,  what  per  cent  can  be  paid  as  a  dividend  on  the  capi- 
tal invested? 

BUSINESS   FORMS  IN  BANKING. 


THE  DEPOSIT  TICKET. 

Firms  depositing  money  in  bank  should  fill  out  a  deposit  ticket,  giving  the  date,  items, 
and  amount  of  each  deposit.  The  cashier  or  the  teller  of  the  bank  proves  the  items  of  each  de- 
posit, and  if  they  are  found  correct,  enters  the  amount  in  the  depositor's  pass  book  and  places 
the  ticket  on  file  for  the  bookkeeper. 

Every  check  and  draft  deposited  should  be  indorsed  by  the  firm  making  the  deposit.  Even 
checks  that  are  drawn  payable  to  bearer  should  be  indorsed  when  deposited. 

If  A.  Learner  deposited  in  the  First  National  College  Bank  of  Chicago,  currency  $50,  coin  $10, 
checks  on  Chicago  banks  for  $75,  $20,  and  $30,  and  checks  and  drafts  on  banks  in  other  cities 
for  $120,  $215,  and  $75.50,  his  deposit  ticket  would  be  made  out  as  follows: 


First  National  Golieoe  Bank. 


DEPOSITED    BY 


A.  Learner 


Cliicago, 

/an.  2 

i8g 

7 

All  Items  Except  Local  Checks, 
and  Total  of  Local  Checks. 

C^l  ifPOcr»jr^yy 

. 

50 
10 

120 
215 

75 

I2o 

COIh 
OTH 

J 



ER  ITEMS 

LOCAL  CHECKS. 

75 
20 

30 

50 

595 

50 

PRACTICAL  BANKING. 


197 


THE   BANK   PASS   BOOK. 

The  following  represents  a  double  folio  of  the  bank  pass  book,  which  is  carried  by  the  de- 
positor. It  is  taken  to  bank  with  each  deposit,  that  the  amount  of  the  deposit  may  be  en- 
tered on  the  debit  page  by  the  teller  of  the  bank,  this  record  being  the  same  as  a  receipt  from 
the  bank.  Once  a  month,  or  as  often  as  the  depositor  desires,  the  checks  which  have  been  paid 
for  him  by  the  bank,  are  entered  on  the  credit  page,  and  the  account  balanced,  showing  the  re- 
m;iinder  of  the  depositor's*  cash  in  bank. 

After  the  paid  checks  are  entered  in  the  pass  book,  they  are  returned  to  the  depositor,  who 
can  then  prove  his  bank  account,  as  well  as  his  cash  book,  and  file  the  checks  in  a  package 
called  "Canceled  Checks."  Canceled  checks  may  be  required  months  after  they  have  been  re- 
corded, in  order  to  prove  some  payment  that  we  have  made.  For  this  reason,  business  men 
usually  prefer  to  make  payments  by  check,  as  the  canceled  check  is  a  perfect  receipt. 

If  the  list  of  checks  more  than  fills  the  page  on  which  the  deposits  are  recorded,  the  totals 
of  both  deposits  and  checks  can  be  carried  forward,  so  that  the  footings  may  be  opposite  each 
other  when  the  account  is  balanced.  •  If  a  depositor  has  a  considerable  number  of  canceled 
checks,  it  is  customary  for  the  banker  to  list  these  on  a  separate  sheet  of  paper,  which  he  re- 
turns with  the  canceled  checks,  merely  recording  the  total  of  the  checks  in  the  pass  book. 

Balancing  the  depositors'  pass  books,  is  a  final  proof  that  the  depositors'  accounts  in  the 
bank  ledger  are  correct.  A  check  might  be  debited  to  a  wrong  depositor  during  the  month, 
and  thus  make  an  error  in  two  accounts,  without  throwing  the  books  out  of  balance,  but  if  the 
checks  are  sorted  and  entered  in  the  pass  books,  such  an  error  would  appear  when  the  balances 
shown  in  the  pass  books  are  compared  with  the  balances  in  the  depositors'  ledger. 

We  give  below  an  open  folio  of  A.  Learner's  pass  book.  The  first  entry  on  the  left  page 
represents  the  record  that  would  be  made  for  the  preceding  deposit  ticket.  Other  subsequent 
deposits  are  represented,  the  one  for  Jan.  16,  being  a  credit  for  the  proceeds  of  a  draft  collected 
for  A.  Learner.  The  entries  on  the  right  hand  page  represent  A.  Learner's  canceled  checks 
that  are  returned  to  him,  when  his  pass  book  is  balanced  at  the  close  of  the  month.  The  space 
next  to  the  money  columns  on  the  right  hand  page  is  for  any  memorandum  or  explanation  that 
may  be  required  with  any  of  the  checks. 


FIRST  NATIONAL  COLLEGE  BANK  IN  ACCOUNT  WITH  A.  LEARNER. 


5'3 

80 

1897 

25 

17 

50 

Jan. 

2 

Deposit 

595 

50 

85 

12 

50 

9 

" 

22.5 

20 

05 

35 

50 

16 

Col.  129 

250 

67 

36 

30 

Deposit 

275 

25 

95 
40 
90 
18 

50 
25 

35 
70 

23 
59 

09 

ID 

I 

Balance 

~11. 

73 
513 

80 

Bal. 

543 

26 

1345 

1345 

75 

Feb. 

543 

26 

198  HIGHER  ACCOUNTIlSiG. 

CERTIFICATES  OF  DEPOSIT. 

• 

When  a  party  places  money  in  bank,  which  he  does  not  intend  to  draw  out  for  some  time, 
he  usually  takes  a  certificate  from  the  cashier  of  the  bank,  which  is  made  negotiable,  and  in  all 
respects  similar  in  character  to  a  note  due  on  demand.  The  following  certificate  illustrates  the 
form  generally  used : 

^  500  Eureka,  Ills.,  Sept.  g,    139 

Business  College  Bf\NK. 

I  Hereby  Certify,  That      Z'^'^^fj^^^f.r^*;^'^.... 

has  deposited  in  this  bank ^^.lE^^.^I^£. _ DOLLARS, 

payable  to  his  order,  on  surrender  of  this  Certificate. 

[sIq,     i2g  R.  E.  Quinlan 

Cashier 


A  time,  certificate,  one  payable  at  a  specified  date,  would  insert  the  time  after  the  word 
payable ;  as  "payable  six  months  irom  date,  to  his  order,  on  surrender,  etc." 

BANK    CHECKS. 

A  bank  check  is  an  order  on  a  bank,  drawn  by  a  person  who  has  money  on  deposit  in  the 
bank.  Checks  are  drawn  payable  to  order,  or  payable  to  bearer.  If  a  check  is  made  payable 
to  the  order  of  a  given  party,  that  party  must  indorse  his  name  on  the  back  of  the  check,  before 
he  can  dispose  of  it  to  another  party  or  have  it  cashed  at  bank.  A  check  payable  to  bearer  can 
be  passed  from  one  party  to  another  without  indorsement.  The  banker  should  never  cash  a 
check  or  receive  it  on  deposit,  unless  it  is  indorsed  by  the  party  presenting  it,  and  he  should 
also  see  that  all  other  necessary  indorsements  are  on  the  back  of  the  check. 

Checks  are  sometimes  dated  ahead,  being  made  payable  at  a  future  date.  In  case  of  such 
a  check,  the  banker  should  not  honor  it  before  the  date  given  on  the  check. 

The  following  is  the  form  of  bank  check  most  commonly  used: 

£!Mi>afi>,  ^f^,  (J,    159 —  ]S[o.  39 

f^ay  to  tl)^  opdep  of     ^ij^a- ^^^i-^i^m  |  ^z,^ 

j^PH^u^<Uu'a  #  :^  ^0 1 1  a P(? 


PRACTICAL  BANKING. 


199 


CERTIFIED  CHECKS. 

If  a  check  is  drawn  for  more  money  than  the  depositor  has  to  his  credit  in  bank,  the  check 
will  not  be  paid  unless  the  depositor  has  arranged  with  the  banker  to  allow  an  overdraft.  For 
this  reason,  a  person  who  receives  a  check  is  not  certain  that  it  will  be  paid  when  presented  at 
bank,  unless  he  knows  the  financial  standing  of  the  person  that  drew  the  check. 

To  assure  the  payment  of  a  check,  it  is  customary  to  present  it  to  the  bank  on  which  it  is 
drawn,  and  the  teller  or  cashier  will  certify  the  check,  if  good,  making  the  bank  responsible  for 
its  payment.  The  amount  of  the  certified  check  is  charged  at  once  to  the  depositor,  and  it  be- 
comes a  written  obligation  of  the  bank,  like  bills  payable. 

The  teller  certifies  a  check  by  writing  or  stamping  across  the  face  of  the  check,  the  word 
"Certified,"  the  date,  the  name  of  the  bank,  and  his  name  as  teller. 

The  above  check,  having  been  certified,  would  appear  as  follows : 


£%Uafi>,  ^^^,  q,    15^ IvTc.    ^^ 


^ay  to  tlj^  opdep  of     /i^^^  S^^^i^t^^ 


25 
100 


dollars, 


Tiimf-i^  Tflf   "Ut^Jcm^ 


BANK    DRAFTS. 

Banks  assist  business  firms  in  sending  and  receiving  remittances  of  money,  by  issuing  bank 
drafts  and  by  cashing  drafts  drawn  by  other  banks.  Every  bank  selects  a  banking  correspondent 
in  some  commercial  center,  sending  a  sum  of  money  or  an  amount  in  drafts  drawn  by  other  banks, 
for  credit  on  deposit  at  the  banking  center.  The  bank  then  sells  drafts  on  this  banking  center 
to  firms  who  want  to  remit  money,  charging  a  slight  advance  above- the  face  of  the  draft  for  ex- 
change. Regular  depositors  who  have  a  large  balance  on  deposit  in  the  bank  are  not  always 
required  to  pay  exchange. 

The  firm  purchasing  the  draft  can  have  it  made  payable  to  the  firm  who  is  to  receive  it,  or 
they  can  have  it  made  payable  to  their  own  order  and  indorse  it  to  the  firm  who  is  to  receive  it. 

If  A.  Learner  wanted  two  drafts,  one  payable  to  the  firm  who  is  to  receive  it,  and  the  other 
payable  to  his  own  order,  which  he  could  indorse  to  the  firm  who  is  to  receive  it,  he  would  fill 
out  a  request  for  drafts  except  the  amount  of  exchange  and  the  total,  which  would  be  inserted 
by  the  banker  when  the  drafts  were  filled  out. 


[Drafts  Wanted.] 


Chicago,  Jan,  g,  189  7 


Wanted   by  A.  Learner 

Drafts   on  I^e-w  York 


TO  THE   ORDER  OP 

AnOUNTS.           1 

Brown  and  Bentley 



100 
200 



A.  Learner 

Exchange, 
Total, 

50 

300 

50 

200 


HIGHER  ACCOUNTING. 


The  first  of  these  drafts  would  be  filled  out  by  the  cashier  of  the  bank,  as  follows : 

First  National  Collegfe  Bank 

f^ay  to  ti;c  opder  of      B^t^pu^p  #  Bf^Uf^f  %  foo, 

dollars, 


Ufp^  Wi-^di^t-d 


TO  THE  CENTRAL  NATIONAL  BANK, 

NBW  YORK. 


Cashier. 


DISCOUNTS. 

If  a  depositor  takes  notes  or  drafts  to  the  bank  for  discount,  he  should  fill  out  a  discount 
ticket,  giving  a  list  of  the  papers  left  for  discount,  the  face  of  each,  the  interest  to  maturity,  and 
the  amount  of  each,  the  total  of  the  amounts,  the  discount  and  proceeds.  The  teller  can  then 
verify  these  amounts,  and  pay  the  proceeds  or  give  credit  for  the  same  on  deposit. 

If  A.  Learner  discounted  a  note  bearing  interest,  signed  by  C.  A.  Martin,  and  a  araft  drawn 
on  R.  E.  Parker,  he  would  fill  out  a  discount  ticket,  as  follows: 

Chicago,  Jan.  16,  '897 


Notes  and  Drafts  Left  for  Discount. 


By                  A.  Learner 

Note  or  Draft 

MAKER  OR    DRAWEE. 

Face. 

Int.  to 

Maturity. 

AMOUNT. 

Note 

C.  A.  Martin 

200 

I 

75 

201 

75 

Draft 

R.  E.  Parker 

150 

150 

-- 

-- 

Total, 

351 

75 

Discount,           -           -           -           - 

5 

25 

Proceeds,     =           -           -           -           - 

346 

50 

PRACTICAL  BANKING. 


20 1 


COLLECTIONS. 

If  a  firm  leaves  a  number  of  notes  and  drafts  at  bank  for  collection,  he  should  have  a  mem- 
orandum receipt  from  the  teller  of  the  bank.  Business  men  do  not  always  require  such  re- 
ceipts, but  the  more  careful  firms  have  such  receipts  filled  out  ready  for  the  teller's  signature 
when  the  papers  are  left  at  bank  for  collection. 

In  business  practice,  if  the  student  has  only  a  few  papers  to  leave  for  collection,  he  can  list 
them  in  the  last  two  pages  of  his  pass  book,  and  the  teller  can  check  these  entries  when  the 
papers  are  left  at  bank  and  sign  for  them  in  the  pass  book,  merely  writing  his  name  as  teller 
and  the  number  of  papers  he  is  receipting  for. 

In  the  office  training  course  the  number  of  collections  will  be  greater  than  in  business 
practice,  and  the  receipt  form  should  then  be  used. 

If  A.  Learner  left  three  collections  at  bank  he  would  list  them  in  the  last  folio  of  his  pass 
book,  giving  the  date  left,  the  payer's  name,  and  the  amount  of  each  collection.  The  teller 
would  sign  for  the  number  left,  on  the  next  Ijne  below  the  last  collection,  so  that  other  collec- 
tions could  be  listed  below  his  signature  at  a  later  date. 

(Receipt  for  Collections  in  the  Pass  Book.) 

This  Bank  in  receivine  collections,  acts  only  as  your  agent, 
and  does  not  assume  any  responsibility  beyond  due  diligence  on 
its  part,  the  same  as  on  its  own  paper. 


COLLECTIONS. 


1897 

Jan. 

15 

H.  C.  Manning 

150 

E.  H.  Drummond 

50 

50 

M.  B.  PatterFon 

75 

25 

(3)  E.  C.  Watson, 

Teller. 

(Memorandum  Receipt  for  Collections.) 


Chicago,     Jan.   jj, 


1897 


Received  of  Williams  &  Co.  the  following  paper  for  collection: 


DATE  OF  PAPER. 

NO. 

Note  or   Draft. 

PAYER.                          1                 WHERE  PAYABLE. 

AMOUNT. 

1897 

Jan. 

9 

I 

Note 

E.  A.  Horton                                Salina,  Kans. 

150 

80 

— 

2 

Draft 

C.  M.  Pembroke                        St.  Paul,  Minn. 
R.  A.  Martin                      i         Creston,  Iowa. 

256 

35 

3         i     Note 

119 

29 

. 

First  National  ColJege  Bank, 

E.  C.  Watson 

,  Tell«r. 

BANK   CORRESPONDENCE. 

Correspondence  between  banks  usually  relates  to  remittances  or  collections.  Each  bank 
selects  one  or  more  banks  in  commercial  centers  as  its  regular  correspondents,  and  all  bank 
drafts  or  checks  drawn  on  banks  in  the  same  city,  or  in  cities  near  the  corresoondent,  are  sent 
there  for  collection  and  credit. 

The  following  represents  a  remittance  from  the  First  National  College  Bank  of  Chicago  to 
its  New  York  correspondent. 


202 


HIGHER  ACCOUNTIJVG. 


[Remittance  Sheet.] 
First   National   College  Bank. 


Cashier  Central  National  Bank 


Chicago,  Jan.  g,  1897 


Nezu    York 
Dear  Sir: 
Epelosed  pleaje  fipd  tl?e  folIou;lp($  paper  for  eoll^etiop  apd  (;redit: 


NO. 

DRAWEE. 

AMOUNT. 

2426 

4th  Nat.  Bk.,  New  York 

1000           ! 

1652 

Mer.  Nat.  Bk.,  Boston 

850 

992 

Traders'  Nat.  Bk. .  New  York 

1200 

3050 

The  following  represents  the  indorsement  on  the  back  of  each  draft  in  above  remittance: 


Papers  sent  to  other  banks  for  collection  should  be  endorsed  as  follows : 


PRACTICAL  BANKING. 


203 


If  the  First  National  College  Bank  sends  notes,  drafts,  or  checks  to  another  bank  for  collec- 
tion, directing  them  to  remit  the  proceeds  as  soon  as  collected,  the  cashier  would  use  the  follow- 
ing form: 


BANK. 

Chicago,  Jan.  16,         1 897 


THE  ^^^^^  National  College 

Cashier   Com.  Bank  of  Tfenion, 

Trenton,  Mo. 
Dear  Sir:     We  enclose  for  collection  and  returns,  items  listed  below: 


OUR  NO. 

KIND  OF  PAPER. 

IF     PROTRST 
MARK  X. 

PAYER. 

AMOUNT. 

91 

Note 

G.  C.  Harmon 

127 

50 

93 

Draft 

E.  A.  Carter 

125 

95 

Note 

0.  E.  Swinton 

92 

25 

Please  give  the  above  your  prompt  attention,  and  oblige 

Yours  truly, 


Charles  Sumner, 


Cashier. 


If  the   Commercial   Bank   of  Trenton   collected  the  two  notes,  and  remitted  for  proceeds, 
returning  the  draft  unpaid,  they  would  send  the  following  report  of  collection: 


THE 


Commercial 


BANK. 


Trenton,  Mo.,  Jan.  20,      1897 
Cashier  First  Nat.  Col.  Bank, 

Chicago 

DEAR  SIR:     Het e^vith  please  find  draft  Mo ,  2gj. 

On  New  York Am''t  $2ig.2j ,, returns  for  collections: 

Yoiir  No gi $12^.^0 

Your   No 95 _ S  g2  2^ 

Your   No $ 

Your  No. S 

Total $2ig.'j^ 

Exchange,  $       jo. $  2ig  2^ 

We  return  herezvith  unfaid,  with  reasons  for  non-fayment  if  any  endorsed,  col- 
lections your  No.  gj, . .  ..Refused  fayment, 

Yours  truly, 

G.  A.  NEVINS, 

Cashier. 


204  HIGHER  ACCOUNTING. 

If  the  First  National  College  Bank  had  sent  above  papers  for  "collection  and  credit," 
instead  of  "collection  and  returns,"  the  Commercial  Bank  would  have  sent  the  following  reply, 
instead  of  the  one  last  given. 

"J"  HE.  Commercial  BANK 

Trenton,  Mo.,  Jan.  20,      iSgy 

Cashier,  First  Nat.  Col.  Bank, 

Chicago. 

DEAR  SIR:      We   have   this  day  placed  to  your  credit  $2ig.25 
proceeds  of  collections: 

\our  No .  . .  .gi $12^.^0 

Your  No . . .  .gs $  g2.25 

Yom  No $ ^ 

Total,         -         .         -     f2ig.y^ 

Exchange,  $        jo $2ig.25 

REMARKS: 

We  let  urn  your  collection  A^o.  gj,  payment  refused. 

Youis  tiuly, 

G.  A.  NEVINS, 


Cashier. 


NOTICE  OF  NOTE  DUE. 


When  a  bank  has  a  note  for  collection,  the  cashier  should  send  a  notice  of  the  same  to  the 
maker  of  the  note,  a  day  or  two  before  its  maturity. 
The  following  form  is  commonly  used  : 

Commercial  Hanli, 

Indianola,  la.,  Jan.  ig,      J 897 
Mr.  P.   fi.  fienlley, 

City. 


T>ear  Sir: 

I  Hold  your  note  for  $I^fS  and  interest  $3-75 


Bated_I^^ejj,J^^^^  Due J^^,:J,^^J^91 

Payable    to       !f.^^.^!!^...^...!^!^.:.:...^.^.^£".€'^.:. 

C.  p.  Crandall, 


Cashier. 


PRACTICAL  BANKING.  205 

PROTESTS. 

If  a  note  having  one  or  more  indorsers  is  in  the  hands  of  a  bank  as  owner  or  collection 
agent,  and  the  same  is  not  paid  when  due,  it  is  customary  for  the  bank  to  have  the  note  protested 
for  non-payment. 

A  protest  is  a  formal  declaration  by  a  notary  public,  referring  to  the  note  attached  or 
giving  a  copy  of  the  same,  and  stating  that  payment  had  been  demanded  and  refused,  giving 
the  reason  for  the  refusal,  if  any,  and  stating  the  object  of  the  protest.  The  notary  also  sends 
a  notice  of  non-payment  to  each  indorser,  whose  name  is  on  the  protested  paper. 

Henry  Thompson,  of  Cedar  Rapids,  Iowa,  gave  a  note  for  one  hundred  dollars,  dated  Sept. 
30,  1896,  and  due  Feb.  i,  1897,  payable  at  his  office  in  Cedar  Rapids.  The  note  was  made 
payable  to  J.  T.  Johnson,  of  Big  Rapids,  Mich.,  who  indorsed  it  to  Charles  Graham,  of  Minne- 
apolis, Minn.  Graham  indorsed  the  note  to  the  College  National  Bank,  of  Minneapolis,  who 
sent  it  to  the  Cedar  Rapids  Bank  for  collection.     The  note  was  not  paid  when  due. 

In  such  a  case,  the  following  protest  would  be  drawn  by  a  notary  public  in  Cedar  Rapids: 

CERTIFICATE  OF    PROTEST. 

STf\TB  O^--i0WA ) 

r   SS. 

LINN COUNTY.    )  BE  IT  KNOWN,  That  on  this First 


day  of February ..in  the  year  of  our  Lord,  one  Thousand  Eight  Hundred  and  Ninety seven. 

I, Thomas  Grant, a  Notary  Public,  duly  commissioned  and  sworn,  and 

residing  in Cedar  Rapids, in  said  County  and  State,  at  the  request  of 

The  Business  College  Bank  of  Cedar  Rafids, 

went  with  the  original note which  is  attached,  to  the  Office  of 

Henry  Thompson 

and  demanded payment thereon,  which  was  refused , 

Whereupon,  I,  the  said  Notary,  at  the  request  aforesaid,  did  PROTEST,  and  by  these  Presents  do  Solemnly 

Protest,  as  well  against  the maker of  the  said note 

the  indorsers  thereof,  as  all  others  whom  it   may  or  doth  concern,  for  exchange,  re  exchange,  and  all  costs,  charges, 

damages,  and  interest  already  incurred  by  reason  of  the  non- payment of  the  said 

note , 

And  I,  the  said  Notary,  do  hereby  certify  that  on  the  same  day  and  year  above  written,  due  notice  of  the  fore- 
going Protest  was  put  in  the  Postoffice  at Cedar  Rapids,  lovja, as  follows: 

Notice  for /.  T.  Johnson,  Big  Rapids,  Mich 

Notice  for .Charles  Graham,  Minneapolis,  Minn 

Notice  for College  National  Bank,  Minneapolis,  Minn 

Each  of  the  above,  named  places  being  the  reputed  place  of  residence  of  the  person  to  whom  this  notice  was 

directed. 

IN  TESTIMONY  WHEREOF,  I  have  hereunto  set  my  hand  and  affixed  my  Official  Seal,  the 
day  and  year  first  above  written . 

Thomas  Grant, 

Notary  Public. 

FEES— Noting  for  Protest.. 25  cents;  Protest 75  cents;  Noting  Protest 25  cents;  Notices .3ocenti 

Certificate  and  Seal 25  cents;  Postage ;  Vol q ;  Page 72 ;  %-.i.8o 


2o6  HIGHER  ACCOUNTING. 

Elach  indorser  should  receive  a  notice  of  protest  like  the  following: 

NOTICE  OF    PROTEST. 

STflTE  OF    •/<»««»  ] 

Vss. 
COUNTY  OF....Z»«i» ) 

C^dar  Rapidi,  la. ,  Feb.  i, iSgj 

Sir: 

A note for  {%roo)  One  Hundred 

DoUars » 

Dated September  jo,  i8g6 

Payable Felrmmry  i,   iSgrj 

Signed  by Henry  T%ompstm 

Endorsed  by you 

Being  this  day  due  and  unpaid,  and  by  me  PROTESTED  for  non-pa} roent.  I  hereby  notify  you  that  the  pay 
ment  thereof  has  been  duly  demanded,  and  that  the  holders  look  to  you  for  payment,  damages,  interest  and  costs. 

Done  at  the  request  of TTte  Business  College  Bank  of  Cedar  Rapids 


Thomas  Grant 

NoUry  Public. 


To /.  T.  Johnson 

Big  Rapids.  Mich 


UNIVEESITY  OF  CALIFORNIA  LIBRARY 
BERKELEY 


THIS  BOOK  IS  DUE  ON  THE  LAST  DATE 

STAMPED  BELOW 

Books  not  returned  on  time  are  subject  to  a  fine  of 
50c  per  volume  after  the  third  day  overdue,  increasing 
to  $1.00  per  volume  after  the  sixth  day.  Books  not  in 
demand  may  be  renewed  if  application  is  made  before 
expiration  of  loan  period. 


OCT  16  1917 
SEP  27 1918 

JUL  311929 


MMV    %> 


50m- 7,*  16 


b.-^    >LJc^ 


VE  02748 


j--- 


